PM to appear before panel investigating bond auction on Monday

Friday, 17 November 2017 00:08 - - {{hitsCtrl.values.hits}}

Reuters - Sri Lankan Prime Minister Ranil Wickremesinghe will appear before a panel investigating alleged irregularities in government bond sales, the panel’s chairman said on Thursday.

Appointed by President Maithripala Sirisena after demands from opposition lawmakers, the panel has been looking into a central bank bond deal that some government critics said raised government borrowing costs.

Chairman K.T. Chitrasiri said that the prime minister would appear before the Presidential Commission of Inquiry on Monday.

Opposition lawmakers have said the bond auction in question lost the state more than $1 billion because of rising borrowing costs in the past two years. But the central bank has dismissed the opposition’s claims.

The auction, originally intended to sell 1 billion rupees ($6.51 million) of 30-year bonds, eventually grew to more than 10 times that amount, to meet government borrowing needs.

More than half of the issue was sold to Perpetual Treasuries, a subsidiary of a company owned by the son-in-law of former central bank governor Arjuna Mahendran, who Wickremesinghe appointed to head the central bank.

Perpetual Treasuries, Mahendran, and his son-in-law have all denies any wrong doing. Wickremesinghe’s supporters also say there was nothing wrong with the sale.

Political analysts have suggested that opposition lawmakers have been trying to discredit Wickremesinghe’s anti-corruption policies and create a rift in the coalition government formed in 2015 by Sirisena’s centre-left party and Wickremesinghe’s centre-right party.

The government has pledged to end the rampant corruption that affected the Indian Ocean island’s previous government.