COPE report on bond scam presented in Parliament

The special COPE report on the Central bank bond issue was presented to the Parliament by the Chairman of the Committee On Public Enterprises (COPE) MP Sunil Handunnetti, a short while ago. 

The 55-page COPE report recommends that former Governor of the Central Bank Arjuna Mahendran should be held directly responsible over the bond transaction and that legal action should be taken against him and responsible individuals.

The report also observed financial irregularities in the Central Bank bond issue and recommended to recover the losses incurred from those involved.   

The COPE chairman said that the report contains 15 recommendations and observations and that there is a clear difference in the report and the footnotes. 

Handunnetti said that 16 members of the committee rejected a report with footnotes and that 9 members rejected a report without footnotes. 

Minister Rauff Hakeem, addressing the Parliament, said that “we have to keep our political differences outside the committee”. None of us have taken a political stand on this, he added. 

Prime Minister Ranil Wickremesinghe stated that the COPE report will be printed, debated in Parliament and then sent to the Attorney General. He stated that they will act according to the AG’s advice. 

The Leader of the House Lakshaman Kiriella moved that the report be printed.

Members of the Joint Opposition requested for a special debate on the COPE report before the budget debate.  

Responding to accusations that the former CB Governor has left the country, the PM said that he had traveled abroad to attend a wedding and that he will return shortly. 

The Sri Lankan-born international banker was appointed to the helm of the central bank in January, after Maithripala Sirisena was elected as President.

There had been rising concerns in bond markets over controversial deals made by Perpetual Treasuries, a firm connected to Arjun Aloysius, the son-in-law of Governor Arjuna Mahendran.

The money markets were in an uproar on February 27 when the CB announced it was accepting bids worth Rs. 10 billion at 9.50-12.50 per cent whereas clients and most primary dealers had made bids between 9.50 and 10.50 per cent, not in the 11-12 per cent range. Only a few bids, including those by Perpetual Treasuries were made in the 12 per cent range.