The total loss to EPF due to its shoddy deals with Perpetual Treasuries is Rs 9.5 Billion and it is now being hidden from the public, Central Bank sources told Colombo Telegraph.
According to our sources the EPF scam which caused a loss of Rs. 9,500 Million has been officially brought to the notice of the Monetary Board by a special investigative team of the Central Bank at its meeting held on 23rd March 2017.
The Investigative Team was led by Assistant Governor Kumudhini Saravanamuttu and consisted of Pavithra Withanage and Yohan Samaratunga.
The report sets out in detail the manner in which the scam has been carried out by two officials of the Central Bank who have connived and done deals with Perpetual Treasuries linked to former Governor Arjuna Mahendran’s son-in-law Arjun Aloysius, the sources said.
According to the report, the delay which caused the massive losses to the EPF have been done directly with Perpetual Treasuries or routed through other intermediary dealers, Pan Asia Bank and DFCC Bank.
However, a clear audit trail has been left behind making it possible for the Investigative Team to trace all the transactions and to calculate the losses to the country’s main fund, the EPF, the sources added.
According to our sources, the two officials identified as being involved in the scam are assistant Governor R Jayalath and Senior officer of the EPF Saman Kumara.
At the Monitary Board meeting, Monitary Board members Nihal Fonseka and Chrishantha Perera have demanded that the officials involved are immediately interdicted and disciplinary action taken. However, Treasury Secretary Dr. R. H. S. Samaratunga and another Board member Mano Ramanathan have been non-committal. Finally Governor Indrajit Coomaraswamy had wanted to soft-peddle the issue fearing further controversy and decided to send a “show-cause” letter to the officials who have been clearly named in the report as offenders.
“As a result, the offending officials will remain in the service at the same positions perhaps doing further damage and even intimidating the other junior officials.” a Central Bank officer told Colombo Telegraph.