JVP wants Central Bank Governor to resign

The People’s Liberation Front, popularly known as the Janatha Vimukthi Peramuna (JVP), today called for the resignation of Mr. Arjuna Mahendran as the Governor at Central Bank of Sri Lanka.

The Sri Lankan-born international banker, who was only appointed to the post on January 23, has been in the spotlight recently due to the controversy surrounding a Treasury bond issue.

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

President Maithripala Sirisena yesterday appointed a three member committee to investigate alleged irregularities surrounding the recent bond issue by the Central Bank.

However, JVP Parliamentarian Sunil Handunnetti says that appointing a committee is not sufficient and that a formal investigation with transparency is necessary.

“This is not a simple transaction like buying goods from a shop. This could lead to people losing faith in the Central Bank,” he told reporters in Colombo.

He stated that the Governor of the Central Bank should temporarily resign before the investigation is launched and that it is the only way to ensure transparency.

Handunnetti said that because it has been revealed that the company ‘Perpetual Treasuries’ is connected to the son-in-law of the Central Bank Governor, he can resume duties or resign according to the conclusion of the probe.

The money markets were in an uproar on Friday, 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.

The issue over primary market dealer Perpetual Treasuries connected to the son-in-law of Governor Mahendran, allegedly benefiting from the bond issue through ‘inside information’ had led to criticism from various political parties especially as the new government had pledged to do away with the ‘family company’ policy, a charge repeatedly hurled at the UPFA regime.

Handunnetti stated that the reliability of the financial transactions taking place in Sri Lanka should be maintained urged the Minister of Finance to intervene more responsible in such matters.

“If correct our country’s Finance Minister should resign. But we don’t expect such a thing because we all know that will never happen in our country,” he added.