AG directs Acting IGP to arrest 11 bond scam bigwigs

• Former Minister Ravi K, former CBSL Governor Mahendran, son-in-law Arjun Aloysius and other Perpetual Treasuries officials face arrest on multiple charges 
• Alleged offences linked to bond auctions on 29 and 31 March 2016
• Karunanayake accused of committing, abetting offence under Penal Code; others charged under Offences against Public Property Act
• Aloysius, seven others face additional charges of insider dealing, market manipulation
• Reasonable suspicion to arrest suspects and produce before Court: AG

By Chandani Kirinde   

Attorney General Dappula de Livera yesterday directed the Acting Inspector General of Police to obtain warrants from the Colombo Chief Magistrate’s Court for the arrest of 11 suspects, including former Minister Ravi Karunanayake and former Central Bank Governor Arjuna Mahendran, who are to be produced in Court to face charges of criminal misappropriation, market manipulation, cheating and insider dealing in relation to two bond auctions held in March 2016.

The suspects are to face charges under the Penal Code, Offences against Public Property Act and the Registered Stock and Securities Ordinance in connection with two bond auctions held on 29 and 31 March 2016. They face charges of misappropriating Rs. 36.98 billion and Rs. 15 billion respectively at the two auctions.

The AG in his letter to Acting IGP C.D. Wickramaratne said that from the evidence contained in the report of the Presidential Commission of Inquiry appointed to Investigate, Inquire and Report on the Issuance of Treasury Bonds during the period from 1 February 2015 to 31 March 2016, along with Police investigations into a complaint lodged by former Central Bank Governor Indrajit Coomaraswamy and interviews conducted by the Police with Central Bank officials, there was reasonable suspicion that the 11 suspects named were involved in misappropriation, cheating, insider dealing and market manipulation at the two bond auctions.

Along with Perpetual Treasuries Ltd, the AG named Karunanayake, Arjuna Mahendran, Arjun Aloysius, Kasun Palisena, Geoffrey Joseph Aloysius, Ranjan Hulugalle, Muthurajah Surendran, Ajahn Gardiye Punchihewa, Buddhika Sarathchandra, Indika Saman Kumara and Sagarapillai Padumanathan as suspects.

Former Minister Karunanayake is facing charges under the Penal Code of conspiracy by committing or abetting an offence with Perpetual Treasuries and dishonest misappropriation of property under the Offences against Public Property.

Karunanayake also faces charges of cheating representatives of the Central Bank, People’s Bank, Bank of Ceylon and National Savings Bank at the two bond auctions held in March 2016.

Perpetual Treasuries, its owner Aloysius and nine others except Mahendran and Sarathchandra are also facing charges under 56(A) 1(a) of the Registered Stock and Securities Ordinance for failing to comply with the provisions of the ordinance as well as acting in violation of the code of conduct issued for Primary Dealers by the Central Bank by engaging in insider dealing as well as market manipulation to win an unfair advantage at bond auctions.

The AG directed the Acing IGP to record statements from all suspects and promptly send copies to the department as well as to carry out further investigations if necessary.

The AG also directed that the Police report facts to the relevant magistrate and obtain warrants for the named individuals and produce them in Court.