Spotlight turns to ousted CBSL Governor Arjuna Mahendran – new appointment as investigations con...

The controversial Central Bank Bond Issue has been raised for discussion once again. According to experts, the process followed on the Bond Issue is in fact “extremely disappointing”.

Senior Journalist and host of Newsline Faraz Shauketaly says:

“Although Arjuna Mahendran was not given a new contract as the Governor of the Central Bank, the fact remains that on the first bond, approximately 1.8 billion to 2.5 billion was lost on the second bond, which was done about a year later, 2.7 billion was lost.”

According to senior journalist Shauketaly, the Auditor General’s (AG) report confirms that there are losses on the first bond. “We also have a situation which is really anomalous in which, in spite of these actions of the governor of the Central Bank, it later transpired that the governor of the Central Bank at the time Mahendran said that he was acting in the instructions received by the the Prime Minster Ranil Wickremesinghe”, said Faraz Shauketaly.

Faraz also pointed out that, in spite of these matters which “cost the country and its people so much of money”, Arjuna Mahendran remains an adviser to the Prime Minister and is said to be heading an agency coming under the PM’s Ministry. Which according to journalist Faraz Shauketaly, is “an unacceptable situation”.

THE TIMELINE

February 24, 2015
The Public Debt Department decides to call for a bond issue of one billion rupees for a period of thirty years.

February 26, 2015
Urgent meeting with the participation of Ministers Ravi Karunanayake, Kabir Hashim, and Chairman of the United National Party Malik Samarawickrama who was not an MP nor a minister, Governor of the Central Bank Arjuna Mahendran and other officials, regarding the additional financial requirement for the payment of highway contractors.

February 27, 2015
The first bond transaction after the appointment of the new governor takes place.

March 8, 2015
Details of the controversial CBSL bond issue comes to light.

March 9, 2015
President intervenes and orders that a committee be appointed to inquire into alleged losses caused by the February 27 bond issue.

March 10,  2015
A three-member committee appointed by the Prime Minister.
Names of Gamini Pitipana, Mahesh Kalugampitiya and Chandimal Mendis announced as committee members – all of whom have strong affiliations with the UNP.

On the same day, News 1st exposed the ownership of “Perpetual Treasuries” by “Perpetual Holdings” of which Arjun Aloysius who is the son-in-law of the governor, as a significant share holder.

March 11, 2015
On the very next day, opposition lodges complaint at the Bribery Commission seeking investigation into alleged bond scam.

March 13,  2015
UNP Chairman Malik Samarawickrama confirms he was present at the meeting held on February 26 to discuss state funding requirements. Tells News 1st, he attended the meeting as the advisor to the Prime Minister

March 16,  2015
CBSL Governor accepts failure to communicate to primary dealers, the CBSL’s intention to raise more funds through bond issue to News 1st.

March 17,  2015
Prime Minister makes statement in Parliament on alleged bond scam.

Announces that Arjuna Mahendran is on leave….

March 29,  2016
Another controversial bond issue takes place.

June 6, 2016
Committee on Public Enterprise informs the Auditor General to carry out investigations regarding the matter.

June 20, 2016
Former Chairman of the Ceylon Chamber of Commerce exposes the loss made in the second bond transaction to the public.

“This time we have leaked information -we do not have an official thing. Based on the “leaked information” we believe that of this issue made on the 29th the primary dealer in question got 29 billion as he said. The important thing is EPF got only 2.5 billion”m said Chandra Jayaratne,
former chairman of the Ceylon Chamber of Commerce

June 19, 2016
Prime minister informs that Arjuna Mahendran will not be reappointed until investigations into him are completed by COPE.

JUne 29th June 2016
President says a new governor will be appointed.

June 30,  2016
President appoints Dr. Indrajit Coomaraswamy as new governor of the Central Bank

July 4, y 2016
New governor of Central Bank takes oaths before the president promising to uphold the integrity of the Central Bank of Sri Lanka.

Newspaper article in the The Island

July 8,  2016
An article was published in The Island  newspaper, under the headline  Mahendran ignored Public Debt Dept warnings, went ahead with bond sales, officials tell COPE.
It was highlighted, quoting a senior member of COPE, that a group of Central Bank (CB) officials informed the Committee on Public Enterprises (COPE) that Central Bank Governor Arjuna Mahendran had claimed he acted on the instructions of Prime Minister Ranil Wickremesinghe, as regards the controversial bond issue.

After being refused a renewal at the Central Bank, Arjuna Mahendran attended all high level discussions during the Prime Minister’s tour of Indonesia as well as the Prime Minister’s tour of Singapore, at a time when an investigation into Mahendran was being carried out by COPE.

FACE THE NATION

August 1,  2016

Shameer Rasooldeen: The former governor of the Central Bank Arjuna Mahendran has been appointed to a committee to tackle Brexit issues affecting the Sri Lankan economy which is convened by Charitha Ratwatte senior adviser to the Prime Minister…

W.A. Wijewardena (Former Deputy Governor of the CBSL): What matters to us today is that allegations against him, allegations against the Central Bank – and none of these allegations have been probed into so far. And without probing into those allegations if you try have his services available to the government, the government has lost its credibility. So that is where it stands today.

Shameer Rasooldeen: My question to you Dr. Wijeyawardena is very simple, Why is it that the prime minister decides to go ahead with a man that the president rejected?

W.A. Wijewardena: That is where we are lacking the total transparency. And also we are losing our own credibility in this respect because if there has been an allegation against any person, it has to be in fact investigated by an appropriate tribunal. And without getting a tribunal to do that, we simply took him away from the Central Bank and we are now appointing him to another position of the government which doesn’t do well for the current government; which has come to power with the promise of introducing transparency, good governance, good economic policy governance and so forth.

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