Perpetual files CA writ to quash Monetary Board directions

By S.S. Selvanayagam

Perpetual Treasuries Ltd, a primary dealer specialised in the intermediary government security market, filed a writ petition in the Court of Appeal seeking an order quashing the directions of the Monetary Board imposing restrictions on it.

The company claims that in the absence of no formal violation of procedure by it in the purported bond scandal, the true intentions behind the issuing of the directions are mala fide and ultra vires of the regulatory powers of the respondents.

It bemoans that the directions were issued for extraneous reasons in order to satisfy the media and political agendas.

Perpetual Treasuries also lamented that if the directions were enforce the Perpetual Group of Companies would suffer grave and irremediable financial loss and would be driven to bankruptcy.

In the petition filed through Attorney-at-Law G.G. Arulparagasam, the petitioners Perpetual Treasuries Ltd, Perpetual Asset Management Ltd. and Perpetual Capital Holdings Ltd. cited the Central Bank, Monetary Board and 11 others as respondents.

The matter is to be taken up in Court on 20 February.

Some of the directions are that Perpetual Treasuries Ltd. shall not bid at any primary auctions exceeding 12.5% of the total amount offered at such auction and shall not bid exceeding 20% of the offered amount of each item representing different maturities; the daily aggregate of the secondary market transactions by it in government securities shall not exceed Rs. 1 billion; it shall not, except with the prior written approval of the Monetary Board, distribute its profits, retained earnings or reserves; it shall not enter into any transaction for consideration or otherwise, except with the prior written approval of the Monetary Board, in respect to anything not connected with the activities of a primary dealer.