A petition has been filed at the Court of Appeal seeking an order declaring that Arjuna Mahendran is disqualified and not entitled to hold office as the Governor of the Central Bank of Sri Lanka.

The petition was filed through a counsel representing Executive Director of Campaigns for Free and Fair Elections (CaFFE) Executive Director Keerthi Tennakoon.

The Petitioner stated that “there are serious allegations of corruption against the Respondent, in particular in the issuance of treasury bonds on 27.02.2015. The Petitioner states that on 27.02.2015, the Central Bank of Sri Lanka announced an auction of issuing 30 year treasury bonds for Rs. 1000 million and thereafter Public Debt Department of the Central Bank contacted commercial banks and primary dealers over the phone canvassing bids for the above auction around the market rate of 9.35% to 9.75% range. 

At the auction Central Bank of Sri Lanka accepted bids for Rs. 1000 million at weighted average of 11.73%. However bids for Rs. 3000 million from the primary dealer Perpetual Treasuries Ltd., owned by the Respondent’s son in law was accepted at 12.50%. Most of the other banks and the primary dealers bid at low rates below 11.00%.

Soon after the conclusion of the above auction, on 27.02.2015 the Central Bank announced a policy change removing restrictions to excess funds of commercial banks at the standing deposit facility of the Central Bank and effectively increasing overnight money market rates by around 1%. This policy change was done only 3 days after the previous monetary policy announcement where monetary board stated that there was no need to change the monetary policy.

The activities of the said primary dealer Perpetual Treasuries Ltd., who successfully bid for Rs. 3000 million at 12.50 %and Rs. 2000 million at around 12.00% at the auction clearly indicates prior knowledge of impending monetary policy changes.”

The Petitioner also stated that in the circumstances, the Petitioner is entitled to a mandate in the nature of Writ of Quo Warranto declaring that the Respondent is disqualified and/or not entitled to hold office as the Governor of the Central Bank of Sri Lanka.