{"id":160643,"date":"2016-04-12T13:18:28","date_gmt":"2016-04-12T07:48:28","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=160643"},"modified":"2016-04-15T10:08:00","modified_gmt":"2016-04-15T04:38:00","slug":"dew-gunasekera-cries-foul-over-latest-treasury-bond-issuance","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/dew-gunasekera-cries-foul-over-latest-treasury-bond-issuance\/","title":{"rendered":"DEW Gunasekera Cries Foul Over Latest Treasury Bond Issuance"},"content":{"rendered":"<p>Amidst allegations of yet another <a href=\"https:\/\/www.colombotelegraph.com\/?s=bond+scam&amp;x=8&amp;y=6\"><span style=\"text-decoration: underline;\">bond scam<\/span><\/a> at the Central Bank, former chairman of the\u00a0Committee on Public Enterprises (COPE) and leader of the Communist Party <a href=\"https:\/\/www.colombotelegraph.com\/?s=DEW+Gunasekera&amp;x=4&amp;y=7\"><span style=\"text-decoration: underline;\">DEW Gunasekera<\/span><\/a> has demanded as to why the Central Bank did not utilize the EPF Fund, or state banks such as People\u2019s Bank or the National Savings Bank to obtain a short term loan facility instead of selling treasury bonds to \u2018private capital owners\u2019 at a high interest of 14%.<\/p>\n<div id=\"attachment_147047\" style=\"width: 160px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/www.colombotelegraph.com\/index.php\/national-list-nominees-day-light-robbery-of-peoples-sovereign-rights-goes-to-supreme-court\/dew-gunasekera-2\/\" rel=\"attachment wp-att-147047\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-147047\" class=\"size-full wp-image-147047\" src=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/07\/DEW-Gunasekera.jpg\" alt=\"DEW\" width=\"150\" height=\"205\" \/><\/a><p id=\"caption-attachment-147047\" class=\"wp-caption-text\">DEW<\/p><\/div>\n<p>Gunasekera charged that even though the Central Bank had initially announced that it was going to issue treasury bonds to the tune of Rs. 40 billion in March 2016, the bank had instead issued bonds to the tune of Rs. 80 billion.<\/p>\n<p>\u201cThis is the second biggest financial scam within a year,\u201d he told a news conference on Monday.<\/p>\n<p>Gunasekera also demanded Central Bank governor <a href=\"https:\/\/www.colombotelegraph.com\/?s=Arjuna+Mahendran&amp;x=16&amp;y=4\"><span style=\"text-decoration: underline;\">Arjuna Mahendran<\/span><\/a> to reveal the names of the dealers to whom the treasury bonds were issued.<\/p>\n<p>\u201cThis is suspicious because of the manner in which the treasury bonds were doubled even though the original announcement said that bonds will be issued to the value of Rs. 40 billion,\u201d Gunasekera added.<\/p>\n<p>Meanwhile former Deputy Governor of the Central Bank <a href=\"https:\/\/www.colombotelegraph.com\/index.php\/monetary-board-being-caught-in-the-devils-alternative\/\"><span style=\"text-decoration: underline;\">Dr. W. A. Wijewardena has also levelled allegations of the same<\/span><\/a> in a column that was published recently. In his column under the subheading &#8220;Another Bond scandal?&#8221; Dr Wijewardena wrote; &#8220;In the recent past, the central bank, presumably with the approval of the Monetary Board, tried to suppress the interest rates in the market by rejecting all the bids at successive Treasury bill and bond auctions. But this is not a strategy which the bank can follow continuously since it requires the bank to compromise its monetary policy by financing the government through newly printed money. Hence, on occasions, it has to allow the auctions to determine the rates as well as the quantum of funds to be raised.<\/p>\n<div id=\"attachment_147027\" style=\"width: 160px\" class=\"wp-caption alignright\"><a href=\"https:\/\/www.colombotelegraph.com\/index.php\/projects-projects-everywhere-but-who-knows-how-to-run-them\/w-a-wijewardena-3\/\" rel=\"attachment wp-att-147027\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-147027\" class=\"size-thumbnail wp-image-147027\" src=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/07\/W.A-Wijewardena--150x150.jpg\" alt=\"Dr W.A Wijewardena\" width=\"150\" height=\"150\" srcset=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/07\/W.A-Wijewardena--150x150.jpg 150w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/07\/W.A-Wijewardena--300x300.jpg 300w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/07\/W.A-Wijewardena--50x50.jpg 50w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/07\/W.A-Wijewardena-.jpg 559w\" sizes=\"auto, (max-width: 150px) 100vw, 150px\" \/><\/a><p id=\"caption-attachment-147027\" class=\"wp-caption-text\">Dr W.A Wijewardena<\/p><\/div>\n<p>&#8220;In those auctions, rates invariably go up forcing the bank to sell bonds below their face value causing a loss to the government. In <a href=\"http:\/\/www.economynext.com\/Sri_Lanka_long_bond_yields_plunge-3-4641-3.html\"><span style=\"text-decoration: underline;\">a recent such auction<\/span><\/a>, as reported by the financial website \u2018EconomyNext\u2019, a 15-year bond carrying a fixed rate of 11% and maturing in 2030 has been sold at a rate of 14.23% or below its face value. Within three days, the yield rates pertaining to these bonds, according to the web, have plunged by about 2%, increasing their market prices significantly.<\/p>\n<p>&#8220;It has allowed the original bond investors to earn a massive capital gain which could have been earned by the Treasury had the bonds in question been issued at the prevailing secondary market yields.&#8221;<\/p>\n<p>&#8220;According to the Web under reference, the decline in the rates in this manner would facilitate the original investors to cash in Rs. 78 million by way of capital gains for each Rs. 1 billion worth of bonds they hold. This transaction with sudden declines in rates, it appears, is suggestive of another Treasury bond scam now rubbing on the face of the Monetary Board. The experiences in other countries show that, even after many years, such scandalous transactions can be reopened for public scrutiny. This makes it necessary for Board members to exercise utmost due diligence when assessing such transactions.&#8221;\u00a0Wijewardena said in his column.<\/p>\n","protected":false},"excerpt":{"rendered":"<p> [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":147047,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,2186,1,2375],"tags":[],"class_list":["post-160643","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-colombotelegraph","category-featured-news","category-news","category-stories"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>DEW Gunasekera Cries Foul Over Latest Treasury Bond Issuance - Colombo Telegraph<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.colombotelegraph.com\/index.php\/dew-gunasekera-cries-foul-over-latest-treasury-bond-issuance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DEW Gunasekera Cries Foul Over Latest Treasury Bond Issuance - 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