Public debt turns private privilege!

Finance Minister Ravi Karunanayake with Central Bank Governor Dr. Indrajit Coomaraswamy during yesterday’s press conference – Pic by Lasantha Kumara  

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• Over Rs. 5.7 trillion bonds given through private placement; three banks get 68% 
• Ravi K challenges MR to go before court so public can learn full details of bond transactions 

By Uditha Jayasinghe 

Finance Minister Ravi Karunanayake yesterday challenged former President Mahinda Rajapaksa sue the Government on the contentious gazette detailing bond transactions during his time in power as it would reveal questionable private placement deals worth billions.   

Detailing some of the findings of bond transactions made from 2005-2015, Karunanayake noted that of the Rs. 7.2 trillion in bonds over 80% were issued on private placement. 

As much as 68% of these private placements went to three institutions, namely Commercial Bank, Hatton National Bank and Seylan Bank.  

“Private placements were well before we came. The highly dubious situation is private placements are given to whom? There have been three institutions that have received 68% of the private placements and these were all during the period of the previous Government. You all are going after what happened during our time, which was at a public auction. That was nothing at all.” 

The Finance Minister paid kudos to Prime Minister Ranil Wickremesinghe for returning the public action system to bond sales and insisted the Government had worked to make the process more transparent. However, he emphasised that instances of private placement and irregularities of gazette publications resulted in a “travesty of justice of the whole system” and strongly advocated an overhaul of the Central Bank. 

“This is why we say the Central Bank needs a complete overhaul.”      

“This is why I have been saying in the past that things are not working in a professional manner. The new Governor is trying to change that but there has been a residual that has been coming in from the past that goes unchecked and this is what has led to this distortion many a time. What has really happened is one thing, what has been reported is another and what should have happened is completely different!” 

When questioned about whether the Government was attempting to deflect attention from the allegations of insider trading swirling around former Governor Arjuna Mahendran and primary dealer Perpetual  Treasuries linked to his son-in-law Arjun Aloysius, Karunanayake stressed the Presidential Commission would be allowed to continue their work. 

“If the bonds issued to Perpetual Treasuries are proved to be illegal them we will not pay it,” he said. “You all talk only of that but this is much, much worse. Anything that happened was at a public action. These private placements are much worse and this is what we want revealed.”