Central Bank Governor Arjuna Mahendran will go on leave until the investigation into the Treasury Bonds issue is concluded, Prime Minister Ranil Wickremesinghe stated in Parliament today.
The PM stated this during a special statement he made in the parliament concerning the issue. Following the controversy where Mahendran was accused of interfering with the issuance of Treasury Bonds in a way that would favour his son-in-law in the bidding process, a three member committee was appointed by the Prime Minister to probe into the allegation.
With effect from yesterday, the committee is to convene on a daily basis to investigate into the specifications of the transaction.
Mahendran was accused of blatant abuse of power when the rates of the treasury bonds that opened on February 27 through which a sum of Rs. 1 billion was offered was hiked up. The allegation was that although the rates of the bonds were expected to be in the range of 9.5%, it had been escalated up to 12.5 % under the instructions of Mahendran. Media reports claim his son-in-law was fully aware of this step and as a result, managed to gain a massive profit by bidding at the renewed rates.