JO demands explanation from Monetary Board on alleged bond scam

Friday, 4 November 2016 00:01 - - {{hitsCtrl.values.hits}}

By Chamodi Gunawardana

The Join Opposition (JO) Economic Research Unit yesterday, demanded an explanation from the Monetary Board - set to meet today - regarding the controversial Central Bank bond issue.

Speaking to media, JO Parliamentarian Bandula Gunawardena said the Monetary Board should present an in-depth analysis on the issue.

“We urge the CB Monetary Board to conduct a proper analysis over the bond scam and explain the connection former Governor Arjuna Mahendran had to the deal,” he said.

Gunawardena also said the Monetary Board should reclaim the loss incurred by the Central Bank from this particular bond issue. “Apparently, the Central Bank has incurred a loss of Rs. 125b. As we know, it may make more losses since it was a bond issuance for 30 years and the Monetary Board should calculate the total loss to be borne till end of 30 years,” he claimed. Furthermore, Gunawardena said the Monetary Board should issue an explanation as to why foreign investors have withdrawn funds invested in the stock market. “Rs. 300 b has been withdrawn by foreign investors from February 2015 to date, as they are concerned about their funds. The Monetary Board should announce whether the alleged the bonds scam caused this reaction,” he said. Commenting over the decline of foreign reserves from 8.2% to 7.5%, Gunawardena claimed the Monetary Board should conduct an investigation to identify the true reasons causing the decline in reserves. Meanwhile, former Minster Prof. G. L. Peiris said the Government should cancel the primary dealer license of Mahendran’s son-in-law’s company Perpetual Treasuries Limited on the basis of their alleged connection to the bond scam. He argued that the Government should have done this soon after the Committee on Public Enterprises (COPE) report on bond scam was released last week.

Further, Prof. Peiris called for an investigation by the Criminal Investigation Division (CID) on the complaint made by Central Bank Governor Dr. Indrajit Coomaraswamy, regarding leaking of a confidential document from the Central Bank.