4 December, 2020

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

Transparency International Sri Lanka (TISL) is deeply disturbed by the rising concerns raised over controversial deals made in bond markets in recent weeks by a firm connected to the son-in-law of the present Governor of the Central Bank.

Governor of the Central Bank - Arjuna Mahendran

Governor of the Central Bank – Arjuna Mahendran

TISL welcomes the steps taken by both the President and the Prime Minister in appointing two separate committees to probe into the allegations. TISL is of the view that there is a clear case of insider dealing which is a form of corruption, which can only be unearthed with a credible investigation. The public has a right to know who were exactly involved in the questionable insider dealing.

TISL is of the view that it is only right that the Governor temporarily steps down from his position to ensure the space for an independent probe and that the faith placed upon the Central Bank by the public is respected. The government has a responsibility to safeguard the highest level of integrity in the Central Bank, which is the main regulator in the country.

TISL recalls the controversies involving the Central Bank during the previous Government, particularly the previous Governor of the Central Bank and stresses the need to move towards a more credible Central Bank.

*Transparency International Sri Lanka press release

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Latest comments

  • 21
    17

    The same officials who were involved in covering up the sins of the previous governor seem to be doing over time to bring down the current new governor. I think the main flaw here is the fact that Mr Mahendran was naive and did not realize the snakes he was dealing with for example were proper procedures ever followed in previous bond auctions? How did Cabraal end up buying worthless Greek bonds which cost us dearly. Where were the TISL, Friday forum and all the other assorted goody two shoes then? This money after all was raised to do what? To pay the arears due to the Chinese contractors hired by the madamusalaya to glorify himself. These contractors donated handsomely to his re-election campeighn out of their own pockets fully expecting him to win and reward them with more bounty. Turns out they were owed for all the favors granted. No one wants to admit any of this but continue to sling mud gleefully dished out by the minions in the CB who obviously waited for their chance to sabotage the new governor.

    • 20
      16

      “How did Cabraal end up buying worthless Greek bonds which cost us dearly”

      Yes indeed. How did he? Clever crook. He was Ponzi Master No 1 and was responsible for the GoldenKey debacle. Also, the Petroleum Corporation Hedging deal where he bled the country to glory. Now, another crook to replace him. One crook after another crook. This is the Karma of Silly Lanka.And to cap it all, a Finance Minister with a Galleon interest and money laundering charges in a court of law – it surely doesnt trivialize the case of a Prime Minister involved in the smuggling of drugs by the container load, but neverteless it stinks to the high heavens. Just like this latest father-in-law son-in-law Jack & Jillmart.

      • 0
        0

        Cabaraal may have or may not have done mistakes or what you call deals, but what’s important is that he has managed the Central Bank on a steady path to keep the economy going with no hyper inflation while MR government was expanding our forces to end the vicious war that dragged on for 33 years and thereafter while the economy was made to grow at a steady pace. When compared to day light robber barons, Mahendran and the lot, Cabaraal has effectively managed the CB to help MR government reduce inflation to a single digit yet increased our reserves to highest ever figure, kept the SL Rupee steady to attract funds to start many a new projects under his watch of the CB. He has done a good job and I appreciate it.

        Not even three months under Ranil/Chandrica/Sirisena kanda haliya regime even a fool can see for himself that our reserves are on the downward trend, our stock market and Rupee is tumbling, all most all ongoing development projects commenced by MR has come to a standstill and nothing new has started in its place to employ those that lost jobs. All we see for the last few months is Gonja-Ranja like third rate media showbiz but no thieves or proof of fraud to cheer goons and fools who accuse MR as hora, hora and hora. Neither in sight is any new investments lined up to create promised 100,000 jobs nor boasted new loans from IMF etc at low interest to redeem high interest loans from China is in sight.

        In short Sri Lanka is fast moving towards Ukraine type situation. In just six months everyone could see that crisis is in our doorsteps for ourselves.

    • 24
      6

      Looks like it Wera. Arjuna Mahendran was the Chief Investment Officer National Bank of Dubai. They fear his assistance in tracing their billions dollars. See below :

      COLOMBO (EconomyNext) – Sri Lanka has found three bank accounts in a Dubai bank belonging to a ‘leading family’ connected to the former regime which had two billion US dollars in hidden assets, cabinet spokesman Minister Rajitha Senaratne said.

      “We have learned that some of the money has been withdrawn after the election was lost,” Senaratne told reporter in Colombo.

      He said accounts were found in Dubai National Bank.

      One family member had 1.046 billion dollars. A 600 million dollars had been withdrawn by a family member and another 200 million had been withdrawn by “broker who bought deals,” he said.

      Another legislator had over 500 million dollars in an account, he said. A secretary “to very important people” had a joint account with another person “famous for corruption” had another account with 500 million US dollars, he said.

      Senaratne said they had information on an estimated 10 billion dollars of assets, which was higher than the country’s foreign reserves being held outside the country.

      Assistance was being sought from US and Indian authorities to track down assets he said.

      A task force to “investigate, identify, trace, seize and transfer” to Sri Lanka “state assets and revenue” due to the Sri Lanka Government, “unlawfully acquired or procured” by Sri Lankan nationals and nominees and kept outside the country will be set up, he said.

      Update

    • 6
      3

      At least, Ranil and Mahendran should both step down till this matter is cleared.

  • 15
    7

    One person who should be part of the independent investigations is
    former senior treasury official Mr. R.M.B. Senanayake – a regular
    commentator on matters of public interest. RMB is also familiar with
    banking because, in addition to his in-depth knowledge of intricate
    finance ministry and governance affairs, he is also a former director of a leading private bank.

    Kettikaran

    • 2
      3

      RMB has already commented on this issue – on CT itself. Here is the link

      https://www.colombotelegraph.com/index.php/the-30-year-bond-issue-by-the-cb-governor-the-issues-involved/

    • 4
      4

      Kattikaran – I totally agree with you about Mr. RMBS’s ability to head commissions. The govt. should ask for his participation in solving some
      of the intricate problems faced by the govt.,particularly in financial
      sector, where the contracts are handled. He has proved himself as a sincere,honest and experienced man through his writings.A class, hardly
      difficult to get these days, and the govt.should get him on board early
      and he will be an asset.

      • 0
        0

        RMB has already gone public. He cannot be on an investigating Panel. The Panel call however call on him to provide an input.

  • 12
    9

    We are not for Mahendran. But we have to write the truth.

    Appointment of Mahendran to CBoSL is an insider dealing by the New Royal government. This is not a Tamil appointment. It was two birds with a stone. When the Royal Government appoint a co-thief for their earmarked Royal Dealings, the international community was made to believe that the Tamils have got equal opportunities. There was minister who made arrangement to attach a Judge. There is no one single commission. Professor Laksiri Long ago complained about the Stock Exchange. Yet somebody have to appoint a commission. There are complain about the finance minister at the court. No, Not at all. No demand to resign. President said the entire Health Ministry is corrupted, but in his time there was never a commission. Yet no commission even in the New Royals. Fonseka said 50% ministers are thieves. If somebody wants to appoint to investigate the day in day out deals of the a 215 ministers Lankan Cabinet, Commissioners have to be imported. The Old Royal prime mister was connected with containers of drugs. Not just that , The entire old government was brought down because of the corruption. Those gangsters refused. The only commission there was paid to bribed the bribery commission’s staffs. So far no other commission. But the SLFP minsters who organized the protest earlier today said openly that they too robbed the Bank, but demanded this Tamils Pariah has to resign. When this Tamil Pariah made the usual Royal Deal and properly got caught, there are two commissions appointed to investigate. This is the equal opportunity for Tamils!

    Ranil who recommended Mahendren called CM CV as a liar. Comedy Thamai!

    Now, for the international community, it is still difficult to understand why the Mahendran should not be prosecuted to have the information passed to relatives. But, when the other puppet Sripavan make his side insider deals and get dismissed like Shiranee then they will get it.

    • 3
      4

      Prosecute all concerned, even if this reaches RW himself

  • 12
    10

    Either way, AM’s position has become untenable. In fact, if he is cleared it will create a more embarrassing situation for the government as he will have to be reinstated and treated with due courtesy whilst the proverbial monkey will sit on his back.

    Every event, every coin issue ceremony will have the shadow of the now tainted governor with even the peons avoiding being photographed with him. To Ranil, he will be a constant reminder of how he sacrificed his integrity for a unscrupulous friend.

  • 4
    35

    I think the complexity of this question needs to be broken down for simple forks as follows.

    – One the ways a govt’s raise money for various works is by issuing bonds from the central bank. Its essentially asking for a loan from lenders. The lenders can be banks and other organisations approved by the govt as “primary lenders”.

    – Central back Gov son-in-law is a director of one of these primary lenders called “Perpetual Trustees”. Other primary lenders are the major Banks.

    – So the Central Bank asked a loan of Rs 1 Billion paid over 30 years with an interest of around 9%. The interest gets higher for higher amounts.

    – The major Banks make bids around 9% with amounts up to Rs 4 Billion. Perpetual Trustees offer Rs 10 Billion at 12%.

    – The Central bank accepts Rs 10 Billion at 12% by Perpetual Trustees.

    So in a nutshell,

    – The CB has accepted an amount x10 higher than it first asked.
    – The CB has selected a bid from Perpetual Trustees at 12% for 10 Billion when more reputable banks have made offers of up to 4 Billion at an interest rate of 9%.

    • 18
      8

      Vibhushana, You clearly don’t know the first thing about bonds so you should think twice before adding your two cents. You haven’t even got the name of the organisation right!

      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…

      • 17
        6

        Sriyan,

        What is interesting is where did this Arjuna Aloysius or whatever – of Perpetual ….. get sums in the billions. Until this racket came into the public eye Aloysius was not known in that league that dabbles in such high finance. Are the funds they brought forth reflected in their Income Tax returns. If they borrowed from banks, did these banks insist on the usual collateral. Or else are these funds black money (or better still, stolen money from the people) held by young Aloysius belonging to big sharks in politics in the last regime?

        Backlash

        • 8
          6

          Backlash, I would imagine that you didn’t know because of the secretive earlier system of private placements. This has all come to light with the transparent system of public auctions. In fact, if this too had been a private placement we wouldn’t be reading this article would we? Just because you hadn’t heard of him doesn’t mean others haven’t…

          • 2
            0

            “”Just because you hadn’t heard of him doesn’t mean others haven’t… “”

            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.

            later (boyfriend of Laxmi and godfather of her kid)
            financier Theodore ‘Teddy’ Forstmann accurately predicted the worsening of the credit crisis in July 2008, when most pundits believed the crisis had reached its peak.
            Forstmann argued that the excess of money pumped into the economy after the September 11 attacks in 2001 distorted the decision-making abilities of nearly everyone in finance. With an oversupply of money, bankers and other financiers took on more risk with less return. While this allowed many to make money for a time, eventually this risk accumulated, and the consequences led to the credit crisis.
            _______
            This bail out speaks volumes:
            ‘Lanka Reserves Expected to Boost from Indian Currency Swap’
            COLOMBO: Sri Lanka’s official reserves are set to receive a boost by the currency swap arrangement with India, signed during Prime Minister Narendra Modi’s visit, the country’s Central Bank said today. “The official reserves are projected to strengthen further with the proceeds pending from the currency swap arrangement between Sri Lanka and India and other identified regular investment inflows to a level of official reserves comfortable for supporting the exchange rate stability in the immediate future,” Central Bank of Sri Lanka said in a statement. 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.

      • 1
        7

        Yes, but they sold forward contracts to bid 10 bil at 12.5%. Pretty big bet for a 1 Bill offer don’t ya think? Unless they knew more was needed, lol. Syrian or are you Mahendran in disguise???

  • 11
    14

    This man Arjuna Mahendran has to go. No two words about it.

    Sengodan. M

  • 20
    8

    Our economy is very fragile, and cannot take any bad hits like this.
    This man is an outsider and has no obligation nor responsibility to stable and develop the country.
    The appointment was a mistake and this Governtmnet is playing with people’s life’s!!!!

    • 19
      6

      Yes Lasanda

      You correctly indicated .

      Yes it is like other dual citizenship guys who destroyed the country’s economy , and flew away once the brother was defeated

      This sort of activities and those involve d should be nipped in the bud

      • 28
        9

        Only difference is that during Mahinda time the country and the economy was stable. The investors were comming in. Now , all are running away…

        • 10
          36

          Ohh how naive of you. Need to narrow occurred due the mismanagement of the economy by previous government. This money is to pay off the contractors for the work executed during previous regime. Non of the contractors have been paid.

    • 1
      0

      Arjuna Mahendran was there as the chairman of BOI when RW was prime minister in 2001-3. So Mahendran is clearly RW’s man and hence he is a part of this fraud gang.

  • 5
    7

    Guess the business wizards running the GOSL

    Arjun Mahendran
    Ravi K
    Harry J

    Yahapalanaya at its best

    • 3
      4

      All three are big-time Rae Daniel, Daval Miguel type crooks. Glory to the country. Blow ye trumpets and sing the hosannas to the sky.

    • 0
      4

      Why is RW not included?

  • 5
    4

    There is another “side show” to this Bond Issue that we in Sri Lanka must make a note. How many such and other malpractices and mismanagement of our national resources took place in broad day light during the last regime of MR. Were there anyone to raise a hue and cry? Even if there were lonely or collective voices raised, those were “RUTHLESSLY” clamped down and the “REGIME” of MR carried on REGARDLESS. But, see the DIFFERENCE that this “Bond Issue” has made. On 27th February, it came to light and within days and weeks, the protest came up and has already gone into an INQUIRY and now even developed to a proposal to appoint a PSC. Not only that, even the very appointment of the personnel of the inquiry panel is being discussed. I know, even the “New Voters” have joined the discussion and getting involved in “Bond Issue” which was a “Royal Magic” of the elite. Now they know it as simple as raising loans by the Government and how the “Big Time” players, connected to Big Wigs or not, are manipulating to make money. That is VERY HEALTHY and that is what the people of this country did on January 8, 2015. This we have to carry forward and remind the Governing People, that they are ACCOUNTABLE and have to act as GUARDIANS of our national wealth. This is a GOOD SIGN.

  • 4
    14

    Lets put aside the past transactions.
    This is clearly a transaction under ‘Yahapalanaya”.

    People expected transactions under Yahapalanaya to be ” clean and transparent in accordance to proper proceedures”.

    Despite the Yahapalanaya, it has not materialised.
    Why did it happen this way? Need answers.

    AM was brought to clean up & follow proceedures.
    What is he, incompetent or a deceit?

  • 12
    36

    Good point raised by Wera, where the hell was TISL during MR regime ?

    Day light robbery has taken place during that time in UAE alone till now US$ 2 billion found deposited under one of our prominent family, that’s approximately SLR 230 billion, and we scoble about % difference in TB. Out of this $600 million transferred out after elections, is this linked to the former 1st family member who went to Dubai hastily. Now it’s clear why he had to go amid all the chaos. That bring in to question how he was allowed to leave while he is under investigation. Who allowed him to leave. What is their connection ?

    In my opinion the snakes in CB has taken AM for a ride, truth will come out soon.

    It seems 20 years of MR rule has tilted every organization in this country towards corruption, they know no other way of conducting business.

    • 8
      25

      I am baffled by how evenly negative voting has been done for my comments. Seems there is a fix in democracy Maybe some VPN software in play ?

      • 1
        6

        Your minority Governtmnet is doomed:)

      • 2
        2

        Rot has set in all the way up.

  • 16
    3

    Proud Tamilan

  • 3
    17

    A friend told me this morning that he had received an SMS from his friend in down under, that the deal was meant for raising funds for the UNP’s next election campaign. Could it be possible?

    On the other hand what about AM being granted dual citizenship by GOSL when Singapore does not allow its citizens to have dual citizenship? I think this was raise by the leader of the opposition in parliament.

  • 1
    11

    How is Arjuna Mahendran related to Kili Maharajah

    • 2
      1

      both are sterile mules.

      you donkey can ….

  • 4
    0

    One set of crooks have been replaced with anothr set of crooks.

  • 2
    1

    Afzal:

    I have also noticed that sometimes when I give thumbs up, the software AUTOMATICALLY adds a thumbs down or TWO!!!

    I have wondered if the editors at CT are manipulating the thumbs up and down counters to not reflect the actual counts, but rather their own preferred ratio.

  • 0
    1

    You idiots, Cassandra & Javi,
    There is NO RELATIONSHIP BETWEEN ARJUNA MAHENDRAN & THE CRAPPY CEO OF SIRASA.
    KILLI MAHARAJA may be sterile, due to too many encounters with [Edited out]
    I don’t think Arjuna Mahendran is any where near the league of the sterile Casanova of Sirasa.
    Hope you dim wits get the point!

  • 0
    0

    GOD SAVE OUR Gracious QUEEN

  • 0
    0

    [Edited out]

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