23 June, 2024


Ranil’s Committee Clears Arjuna Mahendran

A Three-member committee appointed by Prime Minister Ranil Wickremesinghe to probe into the controversy that has emerged over the issuance of Treasury Bonds has today said that the Central Bank Governor Arjuna Mahendran had no direct role in deciding to accept bids over and above the one billion rupees stipulated in the 30-year bond tender and accept up to 10 billion rupees.



Issuing a statement the Ministry of Policy Planning and Economic Affairs said; “The Committee concluded that there was no evidence to the effect that the governor had direct participation with regard to the activities of the PDD and the Tender Board Committee.”

We publish below the statement in full;

The committee of eminent lawyers which inquired into the 30-year Treasury Bond issuance has made far reaching recommendations to ensure transparency and better governance at the Central Bank.

The three-member Committee had interviewed a large number of individuals, including the governor, officials from the Central Bank, primary dealers and Perpetual Treasuries.

Several deficiencies in the bank’s Public Debt Department (PDD) which handles all matters relating to servicing the domestic and foreign debt of the government of Sri Lanka was observed by the Committee.

“Since the PDD is dealing with the most sensitive information of the government, the committee is of the opinion that a proper supervisory and monitoring mechanism has to be immediately implemented with regard to its activities,” the committee said in its 19-page report.

However, the committee found that Governor Arjuna Mahendran had no direct role in deciding to accept bids over and above the one billion rupees stipulated in the 30-year bond tender and accept up to 10 billion rupees. The PDD had projected the government’s funding requirement as at 2nd March 2015 at 13.55 billion rupees.

“Even though the minutes of the Monetary Board number 4/2015 specifies to issue a 30-year treasury bond, the amount of the bond has not been decided by the Monetary Board (of which the governor is the chairman).

“This exercise is vested with the PDD as per the Operational Manual of the PDD. The decision to accept the excess amount has been taken by the Tender Board Committee that comprises eight members.

“The governor of Central Bank of Sri Lanka is not a member of the Tender Board Committee.”

The Committee concluded that there was no evidence to the effect that the governor had direct participation with regard to the activities of the PDD and the Tender Board Committee.

However, the Committee noted serious lapses on the part of the Bank of Ceylon (BOC) through whom Perpetual Treasuries had routed an unusually large amount of bids for the 30-year bond.

The Committee observed that the bidding pattern of Perpetual Treasuries was unusual and warranted a further investigation.

It noted that the Bank of Ceylon should also carry out a forensic audit and seek explanations from its Chief Dealer and others on ad-hoc decisions risking a large amount of BOC funds involved in the 30-year bond transaction.

The three-member Committee that looked into the 30-year bond issue consisted:

Gamini Pitipana (Attorney-At-Law) – Chairman

Mahesh Kalugampitiya (Attorney-At-Law) – Committee Member

Chandimal Mendis (Attorney-At-Law) – Committee Member

Related posts;

Treasury Bonds Investigation; Ranil’s Committee Lacks Credibility: Chandra Tells President

Treasury Bonds Deal; Clear Case Of Insider Dealing: Transparency International

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Latest comments

  • 16


    • 0

      The Comittee of Inquiry (CoI) has found that the Governor had “no direct hand” in the decision. However the CoI has not stated (in the quotes that have been made public) that the bond issue was properly done. In fact the brief reference to BoC indicates that the CoI is not satisfied with the procedure – irrespective of who in the CB is responsible for the decisions.

      Since the Governor bears formal responsibility for the functioning of the CB, and now that his name has been cleared, it is best that he voluntarily resigns (as the former CJ did once her name was cleared) and allows fresh air to blow again.

  • 14

    This whole episode shows “Shape” Committees are not the monopoly of the crooked Rajapakses only. Someone asked an interesting question earlier (1) Did young Arjun Aloysius come out with his own funds (2) If he has, was this lawfully earned income and declared to IRD in previous years (3) If the sum was borrowed from BoC, what was the collateral offered (4) If BoC made these funds available to Aloysius without collateral Chairman/BoC should be firmly dealt with.


    • 17

      It was you who asked that question on 19th March and sriyan rebuked you
      “The CB offered 1 billion at a coupon rate of 12.5% as per the newspaper advertisement. They accepted 10 billion at 12.5%. Everyone who bid from 9.5-12.5 got quantities. Perpetual did not get the entire 10 billion as you incorrectly stated. As PM stated, in the past the bank has offered 1 billion and taken 11 billion in 2 instances last year. Go learn the subject before talking bull… “

      I gave you a reply too perfect date.
      What he means : It means the barbarians are at the gates,(0|0)
      never,never,never, said Greenspan to Raghuram Rajan but Manmohan felt it and lured the young man.

      Selling price is below purchase price so it is understandable where the money comes:
      During his visit to Sri Lanka last month, Prime Minister Modi had pledged USD 1.5 billion in financial assistance on a currency swap arrangement. The Reserve Bank of India and Central Bank of Sri Lanka agreement will help Sri Lanka keep its Rupee stable. The Sri Lankan Rupee has been under pressure since early January and has fell around 1.5 per cent so far this year despite Central Bank action to sell dollars to defend it. The bank also announced today the cutting of policy interest rates for the first time in 16 months. The deposit facility Rate and the lending facility rate of the Central Bank are reduced to 6 per cent and 7. 50 per cent, respectively. “Current behaviour of market interest rates is viewed to be inconsistent with the continued low inflation and investments needed to address concerns on economic growth for the year. “Inflation is projected to remain at low mid-single digit level in 2015,” the statement added. The Central Bank said the inflation, on a year-on-year basis, declined to 0.1 per cent in March 2015 from 0.6 per cent in February 2015. The annual average inflation also declined to 2.5 per cent from 2.9 per cent recorded in the previous month.

      • 6

        Simiyon and Sriyan are probably the same. Setting up a red herring in the trail does not answer the question asked. It is a massive financial hoax where Arjuna Mahendran’s role is untenable. If the laws are prudently followed both Mahendran and Aloysius will have to be punished.

        Ranil is in a fix and is no saint. He is the man who hid the NGP Panditharatne Report without making it available to the rank and file of the UNP – for whom it was meant. Reason was NGPP held Ranil personally responsible in every Chapter for the debacle in 2004. So much so for the politics of these so-called gentlemen.


        • 8

          RED herring or pink salmon your liking’s are clouded with Archer fan club- racism has no limits in the man.

          Get this into your head ; journalist can expose fraud for all the money they can make but no one is going to stop corruption- heard of Shilling and Enron- who appeared for him and what is he now??
          Nick Leason robbed Coats bank (it is royal charter bank private only) How long did the Singapore keep him locked??
          when a poor man robs $100 tofeed his family he gets 19 years men who rob billions are syndicate- beware of white van its not rajapakse patent right.
          Do SL folk have guts NO – remember Cameron in Jaffna where were the Majority protestors- hiding behind their women folk- shape shape
          You are better off with your icon VP the swindler too fascist.
          Bring me your mind and I will put it to rest.

          • 3

            “Nick Leason robbed Coats bank (it is royal charter bank private only) How long did the Singapore keep him locked??”

            i thought Nick Leason caused the collapse of Barings Bank .

            • 6

              I should have mentioned Bearings as the decorator boys son Nick was employed there- thanks
              Coutts and Bearings both were linked that is why it is very private princess Di cheque were from Coutts (like unmarked stocks & shares)
              Coutts was sold to a swiss back last month- for another good reason.

              These investments and VAT cases all work in circles(syndicates) therefore its very difficult to investigate.
              eg in the UK they end up have some 6 consultants and that is how these guys get rich quick. boys & girls like free masons.
              the more we open up the west the Nigerians West Indies SL India etc all copy the modus of robbery.;)

              Six men have been jailed for a total of 16 years for participating in an insider trading ring that profited from confidential information stolen from the print rooms of two of the City’s biggest investment banks.

              In the Financial Services Authority’s longest and most complex prosecution to date, the men were handed sentences ranging from 18 months to three-and-a-half years at Southwark Crown Court after they were convicted of insider trading offences that netted them more than £732,000 in profits.

              The judge praised the FSA’s “meticulous and exhaustive” £5m inquiry which involved it analysing 200,000 lines of trading over 130 separate accounts as well as trawling through 250,000 emails and 375,000 lines of telephone records and 5,000 texts.
              USB memory sticks played a key part in the case. One contained 900 confidential documents which one FSA investigator said was “like walking into Aladdin’s cave”.
              The former boss of a UBS rogue trader who lost the Swiss bank more £1bn has been banned for life from the financial services industry for his role in the scandal.
              John Hughes, a former senior trader at UBS, effectively condoned jailed banker Kweku Adoboli’s illegal trading and knew about his use of a secret profit pool known as the “Umbrella” to disguise losses made by his trading desk.
              Adoboli was jailed for seven years in 2012 after being found guilty of fraud in connection to a rogue trading scam that ultimately cost UBS $2.3bn (£1.4bn) in losses after the bank discovered a series of unauthorised trades on stock market futures.
              Hughes was fired by UBS for gross misconduct shortly after the fraud was discovered in 2011, but the Financial Conduct Authority (FCA) ruling effectively prevents him from ever working in the City again.
              “He should have been acting as a role model to others. Instead he failed to report the Umbrella and allowed the desk’s profit and loss to be misstated over an extended period,” said Tracey McDermott, director of enforcement and financial crime at the FCA.

  • 7

    Ranil is competing with MARA!!!

    Who has done best deal???

    • 12

      Obviously the wheeler dealer Barbarossa,
      Deciduous: Fall leaves after leaves fall.

  • 4

    Good Governance

  • 6

    Should not there be a statement as to the competence of these three men? They seem to be relative unknowns? What is the extent of their expertise to be members of such a committee?

  • 14

    This should give Ranil an idea. Without sending MR, Gota ,Basil, Weerawansa , Attanayake before a court of law he should in the future just send them before a panel of UNP lawyers !
    The Panel of lawyers who inquired Arjun Mahendran have come to the following 10 conclusions
    1) Mahendran did not know anything about his son-in-law Aloysius’s bid for Billions of worth government Bonds.
    2) Mahnedran did not know the Bond issue was going to be increased by more than 500%
    3) Mahendran did not know that an extraordinarily high interest rate would be paid for these bonds which were oversubscribed to before the interest rate was raised.
    4) In fact Mahendran has never heard of Perpetual ,his son in laws company.
    5) In fact Mahendran did not stay in the house of his son-in –law at the relevant time.
    6) Although Mahendran is a Citizen of Singapore and his son-in-law only a third generation Sri Lankan, they are both very patriotic citizens and would want the systems in this country to be clean and transparent.
    7) Ranil, Ravi, Malik have no financial interests in the Bond issue whatever.
    8) In fact Ranil the permanent leader knows more about Bonds and for that matter every other subject in the world than any other Sri Lankan.
    9) Having the correct blood line and being an old boy of Royal College he is the only and the best thing that can happen to this country.
    10) The learned Panel of lawyers have absolutely no conflict of interest and are very independent men who clearly understood all the issues in this saga..

    Thank you members of the panel and well done !

    • 3


  • 0

    [Edited out] We are sorry, the comment language is English – CT

  • 3

    Naduth hamuduruwange , baduth hamuduruwange ( Translation: The judge and the perpetrator of crime are one and the same).

  • 6

    Aren’t we blessed to have such eminent lawyers in the UNP, to protect innocent foreigners who sacrifice well paying gigs, to come and look after our inhabitants. ?.

    Ranil’s new ally Red Shirt Anura nearly dynamited the reputation of this eminent banker.

    I mean this Banker didn’t even know that the Tender Board existed, let alone fixing the Bond Rate.

    I am sure the SIL wouldn’t have even mentioned the word Bonds , at the dinner table let alone letting the uncle know about the tender with the money borrowed from the bad boys from BOC..

    Ranil must now demand an apology from his red shirt mate and pay compensation to Dr Mahendran for damaging his reputation..

  • 3

    This report says “Even though the minutes of the Monetary Board number 4/2015 specifies to issue a 30-year treasury bond, the amount of the bond has not been decided by the Monetary Board (of which the governor is the chairman).”

    It is inconceivable that a responsible Monetary Board had approved a 30 year treasury without any value or the limits of interest payable on the treasury bond. The minutes are either doctored or the Monetary Board has acted in an irresponsible manner in giving a blank cheque to the Public Debt Department. This should be investigated by the Parliamentary committee and if all the members of the Monetary Board say they have acted irresponsibly, The Governor & the members of the Monetary Board should be all removed.

    The Governor is responsible for approving the draft minutes. He appears to have doctored the draft minute prepared by the Secretary. It is possible that the minutes have not been approved by the members of the monetary board, as they did not meet after the scam.

  • 3

    “The CB offered 1 billion at a coupon rate of 12.5% as per the newspaper advertisement. They accepted 10 billion at 12.5%. Everyone who bid from 9.5-12.5 got quantities. Perpetual did not get the entire 10 billion as you incorrectly stated.” – Simiyon




  • 2

    Whilst the new government is busy pushing the 19A in parliament they are clearly blinded by MR gradual emergence to power. There is a on going media war and in this war MR is clearly ahead craftily winning the hearts of people. The MS&RW Government is being reduced to an administration as witch-hunting government and is not being seen as a government with a progressive agenda.T

    Without a doubt I endorse the corrupt exposure of MR has doings but RW & MS are not fail to address the flank attack being initiated by MR to discredit all the reform work being undertaken by the new gov. The masses don’t understand the implications of reform they judge and elect governments by cheap and well organised social calls MR is making to temples to spread his poison.

    Wake-up RW & MS you are mucking things -up . You have already driven the first nail into your coffin by appointing a committee that has vindicated Arjuna M shattering our dreams of good governance. We the public who elected you don’t need your foolish committees to tell us if Arujuna M is guilty or not. Your action has given MR enough room to make his comeback.

  • 0

    Who new of the need of additional funds. These funds had not being provided for in the Budget. It seems that the Ministry responsible for paying out new about this first. the Finance Ministry would have being informed. Bank of Ceylon received an appliction for a large Loan. The Receiver of the Loan would have had to state what he was going to use the Funds for. The officers who were in He Ministry requiring the money and the prevoius government members may have known what was going on. Probably more money was required. These projects payment has being delayed.
    Oficers, buisnessmen and politicians , accountants kept close tab on a fast buck.It is necessary for a complete overhaul. People who were making money will not stop.This information highway the grape wine must be broken. Freedom of Information means all will know and priviledges will be broken.
    Let us concentrate on Legistlature and implementaion by the Institutions.
    Elections are needed now.

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