The Monetary Board of Central Bank on Friday indirectly admitted to a financial scam by one of its primary dealers, Perpetual Treasuries Limited.
Dr. Indrajit Coomaraswamy – Governor CBSL
In a statement issued on Friday, the Monetary Board expressed its concern over the sharp disparity in the performance of primary dealers, as well as certain issues in relation to the pattern of trading activities.
“In this connection, the Monetary Board instructed expeditious completion of the ongoing process of preparation of the relevant On-Site Examination Reports. This would enable the Monetary Board to make an early determination on the future course of action,” the statement said.
The order to expedite the on-site investigation was issued by the Monetary Board at a special meeting held on Friday to discuss the interim report on the operations of primary dealers including their financial performance during the year ended 31st March, 2016 as well as the five month period ended 31st August 2016.
Perpetual Treasuries Limited, which is linked to Arjun Aloysius, son-in-law of ex- Governor of Central Bank, Arjuna Mahendran recorded a profit of Rs. 5.1 billion for the year ending March 2016. The firm recorded an increase in its profits of up to 430 percent in comparison to the previous year.
jim softy / October 15, 2016
If the Central Bank does not have any discipline an their work leads to disaster, what else to say about the country.
It says, the because of the Central Bank scandle, the Perpetual Treauries earned 84% of the profict. The left over profits were shared between other 16 dealers. Even the State Bank has worked for the perpetual treasureis.
The amazing thing is Ranil wickramasinghe rewared the guy who instigagted it with a Minister post.
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KA Sumanasekera / October 15, 2016
Aloysious is not stupid..Sorry, I should rephrase it.
Aloysious is a lot smarter than this Monetary Board for sure,
Didn’t the FIL, Diaspora Mahendran , whom Batalanada Ranil the PM imported all the way from Singapore, say Aloysious and himself broke all their ties with Perpetual Treasuries, before the FIL signed the letter of Employment from the Yahapalana PM?.
Didn’t Batalanada Ranil confirm it in the Yahapalana Parliament, when our Dalit JO pointed out the shifty deal in the very first Bond Issue ?.
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? tatcher / October 15, 2016
CBK vs Ranil drama has unfolded Monster Mice of Colombo 7.
LK was victim of seduction.
Forbes:”Every moment in life, every opportunity is a choice
to innovate and have an impact.”Frances Colon.
“INSIDE JOB”
Regardless Of What Beijing Says, The New Silk Road Is Not Chinese.- the author of Ghost Cities of China.
The last 1/4 of reckoning – 2016.
Sri Lanka may be in a debt trap that it can’t get out of. This year alone $4.5 billion is due to foreign lenders and next year $4 billion is owed — bills which the country has not yet figured out a way to pay.
The country’s debt-to-GDP currently stands around 75% and 95.4% of all government revenue is currently going towards debt repayment.
******
Much of Sri Lanka’s pile of debt accrued in the process of initiating an entire buffet of large-scale and extremely expensive infrastructure projects under the direction of former president Mahinda Rajapaksa.
Between 2009 and 2014 Sri Lanka’s total government debt tripled and external debt doubled, as the country engaged in a number of costly undertakings — such as attempting to build a new, multi-billion dollar city in the middle of a jungle (which includes the world’s emptiest international airport), constructing one of the most expensive highways ever made, as well as other pricey endeavors, such as spending $42 million just to remove a rock from the harbor at Hambantota.
But this doesn’t necessarily mean that Sri Lanka’s current administration is doing much better. Under President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, who came to office at the beginning of 2015, domestic debt grew by 12% and external debt by 25% without starting any new large-scale infrastructure projects.
The New Silk Road, the emerging network of economic corridors stretching from China to Europe, is often referred to as a Chinese undertaking, Chinese economic diplomacy and geopolitical positioning — something that Xi Jinping and Co are selling to Eurasia. But is this really the case?
If we only look at Silk Road projects that have direct Chinese governmental participation, what we’re left with isn’t much of a belt or a road. It’s the tying-in of projects that are being delivered by a multitude of international players that makes the Silk Road a functioning network.
That said, the fact that China is now playing the leading role in Silk Road development cannot be downplayed — they’ve already committed over a trillion dollars to the endeavor — and the country is without doubt the beating heart of the initiative, but this isn’t enough to brand the entire 60+ country undertaking as Chinese.
When we talk about the New Silk Road what we’re talking about is a network, and delineating the boundaries of any type of network is often a vague pursuit. Where the Silk Road network begins and ends is unclear, when it actually got started is debatable, and inquires into what countries it even includes are often inconclusive. It is perhaps easier to simplify the issue and just label the project as a “Chinese” initiative and look at it through the lens of the Belt and Road — and I’ve been guilty of this as well — but it just isn’t correct: the New Silk Road is no more Chinese than the ancient trans-Eurasian trade routes it’s modeled off of.
http://preview.tinyurl.com/htx8u52
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Silva / October 15, 2016
tatcher,
Few days back fishermen, Malcum Cardinal et al raised voices of concern about the environmental destruction to marine life and plants caused by the sand mining for the proposed port city project.
I think this opposition must be boosted and carried on with the support of many numbers becuase:
China et al for this sole business etc. ends are jeopardizing the sensitive ecological space in Sri Lanka and its traditional fishing industry, marine life etc. China et al are not concerned about the people and environment of SL. They want to push through their own egocentric agenda at whatever cost to this country. Why they expand the Cbo port is becuase they want to create their own centre of business and gravity along the silk route. The solution to this is not creating new land destroying everything existing for millennia. If they need new land they could find some from existing land creating room by relocating coastal families in quality high rising buildings. Some land mass could be created by using the already mined and piled up sand and granite, a limited more mass could be created by using concrete structures and finally some more amount could be tried on retired floating ships that are not recommended for sailing in high seas.
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? tatcher / October 16, 2016
Silva,
During the days of the hippies the church in the southern coastal areas raised concern about deterioration of culture with that came the insurrection…….lately kuddu PM. Environment, is a sub set of culture which is being eaten by vultures. Champuka Revolutionary is a desire to desire Omo a steam engine that can’t sit down because of a tender behind. Contrary to belief the socialist in the island are control freaks who wish to be in power for life by all means.
China has a clean record of winning WTO disputes against America and they did hint that there was no hesitation of taking the Port Project for a conclusion. Ultimately Lanka would have been slapped with a heavy fine and no port city like the flyover stumps we saw for decades on the way to airport.
It’s now like the run down feeling when hit by a truck. Instead of concentrating on the whole and put every off think of just water and drainage disposal which should be self-containing and independent (as it is its to be exclusive zone –clique) than pumping it into the disposal system that exists for the city then planting, soil conservation would follow the stream. Too much noise and a possible 20Khz max does not auger well.
This would be interesting
kuruwatte bajar and the billions before December- night of short knives?? Hunters moon today poooya for fascist skinheads.
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Kalupahana / October 15, 2016
Sri Lanka has been and is being beggared by its politicians, their families and cronies.
Ranil / Mahendran ticket, Sirisena and Mahinds Jarapassa are collaborators in corruption, crime and looting Lanka, while piling on the debt to the poor people in the form of VAT.
Today Poverty and inequality rates a galloping up, and Mahinda Jarapassa and cronies will soon be back in the saddle as Ranil has been totally discredited by the Arjuna Mahendran scandal at the Central Bank. JO of corrupt crooks and MR cronies is right on one thing: the need to seize Mahendran’s assets and seal Perpetual treasuries and uses the funds from their off sohore bank accounts in SINGAPORE to pay off some of the massive national debt of Sri Lanka.
IMF which is supposed to be in charge of Global governance should track the off shore bank accounts and ensure the funds looted from Sri Lanka are returned to pay off debt rather than loading VAT taxes onto poor people.
Ranil and Sira are constantly globe trotting rather than addressing issues and cleaning up the corrupt Justice System that is headed by Wijedasa jarapassa who is in the pocket of the Avant Guard crooks and Gota Jarapassa. Sri lanka is stuck with a bloated military that aids and abets political corruption while the people pay for the tax free lifestyle and super luxury SUVs that are blocking the roads of the corrupt politicians! Sinhala Lanka is cursed by its so-called leaders (UNP and SLFP), who are corrupt and criminal – Sira, Ranil, Mahinda Jarapassa and all their cronies and family members. Just like Tamils cursed by their leaders – Prabakaran to Thondaman and Ponnambalam Jr.
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arancha / October 16, 2016
“”IMF which is supposed to be in charge of Global governance should track the off shore bank accounts and ensure the funds looted from Sri Lanka are returned to pay off debt rather than loading VAT taxes onto poor people””
Brainless voter like kassipu bela when you lose what you like see. You would do the same as those you blame.
say heehaw, heehaw,
Contradictions do not exist. Whenever you think you are facing a contradiction, check your premises. You will find that one of them is wrong- AR.
IMF/WB are private entities -Forbes: The average net worth of a 2015 Forbes 400 member was $3.86 billion, down $6000 million from 2014. As of March 2015, the US has 536 billionaires.
When a borrower is unable to pay BoC or Peoples the bank takes control of company (stage by stage and helps it out to help itself recover) does the bank go to bed with your kith and kin NO. it is not a bankers duty to enter soverign terrority of other nations DON’T YOU AGREE Sink_A_Lam??
Where is the Pahana Candel eliya?
Learn concept of meā culpā is a Latin phrase that means “through my fault” then you can not be false to thy self.
Not what you call Great Gawd Budd- Saṃsāra,Saṃsāra,Saṃsāra.
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Ratmale, Minneriya / October 15, 2016
An Open Letter to the Monetary Board of Sri Lanka
October 15th 2016 (POYA)
Dear Eminent Sirs,
DON’T SEEK TO PUT BLAME ON OTHERS UNTIL YOU ARE BLAMELESS
The reports in this morning’s press arising out of your long awaited meeting yesterday, frankly, did not amount to a “HILL OF BEANS”. I would have liked to have seen some leadership emanating from your goodselves, at this crucial moment.
Frankly you all appear to act like pre-school kids, taking a cue from the parliamentarians, who act like a motley collection of “ata pass” survivalists! Trying to decide on the future course of Sri Lanka for the next 50 years, when the next 12 months seems to be a stretch!
Firstly, may I remind you of your primary responsibilities; which are to guide the Policy of the Central Bank, in as much as it relates to Monetary Policy, namely, the exchange rate, interest rate and management of public debt. It is important that these actions give confidence to the international community, so that our Sovereign ratings are enhanced, which will result in lower interest payments on debts, and the ability to borrow at lower rates in future. It is timely to remind you that many countries’ Central Banks currently borrow at near ZERO INTEREST RATES.
Needless to say the actions of the treasury ALSO has an impact on the above, and they must in turn manage fiscal policy, budget deficit, and public spending in balancing the best interests of the Sri Lankan people within Govt. policy.
Frankly, it is NO secret that both arms have failed miserably with regards to this over a very long period, and scapegoating of those without is not the way to go. The crisis we are faced is NOW CRITICAL because of the profligacy of the previous administration, where the excess borrowings incurred has not been able to provide a public return on capital investment, and the use of long term funding to meet recurrent expenditure.
Having explained these basics, your primary role today is to know how to manage the extraordinarily large Public Debt in a manner that is least painful to the Sri Lankan people who will eventually have to repay this increasing liability over many generations to come.
Unfortunately you must have the courage to pull up the fossils in the Public Debt department who acting as neophytes are making an almighty mess of the job they have been given. It is for you to determine if this is willful, or incompetent.
In my opinion, I believe the whole department MUST be replaced by professionals from outside, and even foreign assistance in order to better manage this aspect, and even obtain the assistance of proven consultants, who are capable of designing a system that is simple to operate and manage the revolving debt. (the ability to refinance borrowings when they fall due, at the lowest possible rate of interest)
It is most important to have this fully operational when the massive refinancing activity is required in 2018 and 2019 when we have to meet capital repayment of large foreign loans.
“Given this background, let me come to the main point I am trying to make here”
It is a blind leading the blind mentality in the CBSL situation now. You have JUST ONE primary dealer, who has identified a weakness in the system, employed the best professionals in the Country, pay them more than your Governor, and who merely take advantage of your own incompetence.
I am very sorry to say that the other primary dealers do not have the same vision, particularly the arms of the clearing banks which have access to far greater funds are NOT bidding! This leads Perpetual Treasuries to take the risk, and reap the reward. Why? The head of PD at the Bank of Ceylon probably has a comfortable remuneration package, whether or not he makes any Bond Dealing profits. Why should he break a leg to work hard and take risks? In this case BOC a state owned enterprise, instead making additional billions in profits for the people of Sri Lanka, lend money instead to Perpetual Treasuries, with full collateral to make money.
Therefore instead of finding fault with the performers, it is time to find fault with those who have failed to perform! Wouldn’t that make a change in thinking? That is the mindset of the 21st Century, and it is time some YOUNG blood is infused into your ranks to be aware of, and retake the MISSED OPPORTUNITIES.
You, collectively have been faced with an untenable situation, where the Media, has grossly misinformed the public due to ignorance of how these systems work, who are then baying for blood. You MUST find fault squarely with the CBSL and its current practices that are outdated, and also the GOSL owned Banks’ current risk averse strategies that are a drag on this economy. You MUST force the clearing banks to reduce spread. That is the ONLY way to grow this economy. That is the single biggest reason for the lackluster performance of the Sri Lankan economy to date, and in NOT taking a loan to buy sophisticated machinery in a company I run is a small micro result of this bad policy.
So please have the courage of your convictions to do what is right, and NOT be partial to here say. What we need in Sri Lanka is excellence, leadership and competence. In my opinion that is the problem with the CBSL, due to its hiring policies that need a drastic change. Sometimes brilliance only lasts 4 years in one’s life, and we have lifers in the CBSL keeping desks warm, worse costing the economy trillions due to their unwise action or inaction!
We as a country cannot afford baggage. We MUST have the best of the best seconded to the CBSL for a maximum of 4 years in the prime of their lives, to do the job and be paid for performance. You will see instant results.
By this show of incompetence, you have now raised the bar. If the CEO of Perpetual Treasuries gets a bonus of Rs500M due to your errors, then it will cost you more to get the best. Remember it is NOT Perpetual Treasuries fault for making profits, it’s the CBSL fault for making it so easy for them. If I had the same access to the funds, so could I do the same, and I am no relation or friend of Arjun Mahendran!
After having read what I have to say, if you believe you are not up to the task, and we understand that, please resign and handover your position to someone who is up to it. I know sufficient independent knowledgeable people who can take your place there, and are able to direct the operations of CBSL in the BEST INTERESTS OF SRI LANKA. This is NOT a sinecure, it is a real JOB.
The future of the Country is at stake and it is your call we are heeding.
Thank you
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Silva / October 15, 2016
The sole culprit is the one or those who created this rule of lending to dealers to settle their dues with CB. The blam then passes on to those who were entrusted with audit and who failed to notice this fund leak. This is gross mismanagement of public funds and is of unprecedented nature and scale. Unprecedented episodes require unprecedented measures of correction. It is public funds that has been leaked and amassed by a private party. If this story is true an unprecedented measure in law must be taken to freeze assets of Perpetual T. and recover unduly and disproportionately acquired public funds. This law under which the funds were stolen must forthwith be annulled. It is towards this end that those concerned must strive and urge the government and not just be frogs in the well going after AM and allosius.
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John / October 15, 2016
The Govt must freeze or confiscate the funds of Perpetual, if found to be guilty.
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Saman Adikari / October 18, 2016
The whole issue is that inside trading of Govt.t Bonds that was launch by Central Bank and Crime committee by Governor of CB. The main culprit is CB-Governor.
The Key factor is Son-in law of CB governor is man who has bidding for CB Bonds. And same persons Company has given, that Bank of Ceylon and Central Bank funding for the purchasing bond from CB after Bidding?
The Primer of SL having soft corner of all Bond deals has another case of suspicion that Bonds inside trading has been involved by CB governor and as well as his immediate staff.
There is clear evidence and record on that ex-Governor of CB and Primer committed crime against public funds is another strong point how to deal with ongoing situation has been even that is not clear to President of SL.
This purely corruptions charges against Primer-Minister, Governor of CB and his immediate staff and scandal was support and adding and abating by his son-in law ‘Company of Primer deals involved CB transactions.
Family nexus primer deals mainly back by Primer of UNP leading ruling party main alliance of current govt..
The Result of that Primer deals company gain two way benefits;
1 Funding from the Public Money and cost of Tax payers collocations.
2 And they earn tremendous profit within short period of 12 months
by primer Trading Company in unprecedented scale of profit
by the blessing of Primer-Minster support.
That is why President that blame on corruptions allegation against certain enforcement authorities, which is misusing by the political power against other who are now belongs to Old UNP leadership.
We want urgent Presindital task force to an Invegeastion on this issues by misused public fund by Prime and ex-CB Governor.
We have no trust on present Govern of CB has many hidden relationships with Primer and CB ex-Governor.
Is this “Good Governance” has been advocated by President and UNP? 2015 January 9th?
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