Mahendran ‘threatened’ me to appoint Saman Kumara: Ex-EPF Chief

1 August 2017 07:53 am - 21     - {{hitsCtrl.values.hits}}

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Former EPF Superintendent A. Jayalath told the Commission of Inquiry that former Governor Arjun Mahendran had threatened him to appoint Saman Kumara, the controversial dealer, for EPF Front Office operations in 2015.

Mr. Jayalath also confirmed that there were certain collusive activities visible during the secondary market transactions happened between the EPF and Perpetual Treasuries, where Pan Asia Bank had acted as an intermediary in November 2015.

Currently working as an Assistant Governor at the Central Bank he had been the Superintendent of the EPF Department from April, 2015 to April 2016.

Mr. Jayalath said several transfers took place with the EPF in 2015 and that when he was appointed Superintendent, two experienced officials, Paduman and Dilini, were transferred from the EPF in April 2015.

Later in June, 2015, Saman Kumara was transferred into the EPF and the witness had appointed him to do Risk Management duties.

The witness said he was concerned about the performance of Saman Kumara because the staff at EPF kept informing him about Saman Kumara’s questionable past and his involvement in several controversial deals when he was at the EPF before.

However, on June 8, 2015, former Governor, Arjun Mahendran had phoned him and scolded him saying that he had sent a CFA qualified person to the EPF and to appoint him to the EPF Front Office.

The witness said the former governor wanted Saman Kumara appointed to the Front Office by going against the wish of the witness.

“The governor scolded me and was given one week to appoint Saman o Front Office. It appeared that he was threatening me then I asked him to give one week to do so,” the witness said.

Subsequently, Saman Kumara was trading in equity matters at the Front Office.

During this time the witness said he was repeatedly asked to intensify secondary market transactions of the EPF by the former Governor and as a result he had to send daily reports relating to its transactions to the Governor, which was not a prevailing practice at the CB.

However, in October, 2015 two officials who were handling matters relating to the Front Office Fund Management were also transferred.

The witness said he kept asking for experienced and skilled persons to operate the division but the Governor was reluctant to send previously transferred people back to the EPF but asked him to use Saman Kumara instead.

The witness said he then appointed Saman Kumara as the head of the Front Office, and thereby he started handling deals relating to the Treasury Bonds.

According to the witness it was also revealed that Saman Kumara was a constant visitor to the former Governor's office and their unusual relationship was evident in several instances. He said it was unethical for Saman Kumara to discuss EPF division’s decisions with the Governor.

It was revealed that questionable secondary market transactions between EPF and Perpetual Treasuries Ltd had been taken place in November, 2015, where PABC acted as an intermediary.

However, in January, 2016 there was a rumor circulating in the market about the EPF’s secondary market transactions.

The witness said an e-mail was circulating at that time and consequently he was asked to conduct an investigation about the matter by the Monetary Board and the then Governor.

It was revealed that the witness had prepared a report identifying some suspicious activities that happened during the alleged transactions based on the information he collected at the middle office.

He said the preliminary investigation was conducted in the absence of a voice recording system at the EPF and therefore he had mentioned in his report that he could not affirm allegations stated.

However, the report was given in February 2016 to the then Governor but the witness had not received any feed back from the Governor afterwards. The existence of such a report came to light only in October 2016 during the inquiry conducted under the new Governor Indrajith Kumaraswami.

The witness also said that he had informed the Governor about the necessity of having a voice recording system to scrutinize the dealers who contact with other counter parties. However, setting a voice recording system was never considered.

According to the PCoI Commissioner, Justice Prasanna Jayawardena’s examination it was revealed that setting such voice recording system into the EPF costs only about Rs. one million.

Subsequently, Deputy Solicitor General Milinda Gunathilake, who led the evidence, played few phone conversations that had been taken place between PABC, PTL, and EPF dealers in the course of secondary market transactions.

These voice recordings were obtained by the investigation from the voice recording system of the PABC.

Having listened to the phone conversations, the witness, Mr Jayalath said that it was apparent that the prices and the rates had been prearranged when PTL and EPF have been transacting in the secondary market through PABC, because there were no negotiations visible in the conversations. (Shehan Chamika Silva)

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  Comments - 21

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  • Freddy Yong Tuesday, 01 August 2017 09:35 AM

    With all these stark revelations being exposed against Mahendran. Alloysius, Ravi K and possibly Ranil and this new guy in town Saman Kumara all embroiled in mega financial wheeling and dealings, Mr. President, please wake up. These are even bigger than the Rajapakshas cheating skills.

    good Tuesday, 01 August 2017 03:31 PM

    good comment

    Sincere Tuesday, 01 August 2017 10:20 AM

    Ooh. I cannot find words even to comment here!

    Eds Tuesday, 01 August 2017 10:31 AM

    If this was someone opposing the Junta, he would have spent atleast a year behind bars now but with all this damning evidence even against the PM, everyone is out and about, making more hay

    Rasheed Tuesday, 01 August 2017 10:41 AM

    The amount what MR government robbed for 10 years, Minister Ravi has done in one year

    dp Tuesday, 01 August 2017 08:06 PM

    which is why he was awarded the best finance minister.

    OMG Tuesday, 01 August 2017 11:38 AM

    True James Bond style! Box office hit !! or is it hit and run?!!

    Chamara Tuesday, 01 August 2017 11:55 AM

    Biggest joke is Central Bank asking all private bank to have a voice recording system for treasury dealing without having a recording system for their own dealers. Time for Central Bank Supervision department..

    sachith Tuesday, 01 August 2017 12:01 PM

    just one question, almost all are giving evidence against Mahendran, alloysius and ravi, but why no one is taken to custody? this is not a pin ketayak.

    Rasheed Tuesday, 01 August 2017 03:03 PM

    It is a commission, they will be submitting the report only. Action will be taken later.

    007 Tuesday, 01 August 2017 12:09 PM

    I am Bond - James Bond - License to Threaten - if not 007 - 000 Wish Sir Roger George Moore was alive

    ceylon Tuesday, 01 August 2017 01:10 PM

    mahendran and son proved srilanka is theplace can steal.in billions and live with luxury even got court. via DM Android App

    ceylon Tuesday, 01 August 2017 01:12 PM

    why mihinda who looted billiobs not touch .all theives are stealing freely and rob the country. via DM Android App

    Sahan Tuesday, 01 August 2017 06:40 PM

    Has anyone prove Malinda's stealing like this?? With hardcore evidence...If so please let us know.. I would like to read it..

    peter Tuesday, 01 August 2017 01:49 PM

    This all nonsenses is due to one wrong appointment ,it is not appointment of mahendran from Singapore as head of central bank but that suni from JVPl as chairman of cope.

    ceylon Tuesday, 01 August 2017 02:32 PM

    these are big things in srilanka.government cant solve because problem is too big.this country cant even keep roads clean.so these are too big to solve. via DM Android App

    ananda Tuesday, 01 August 2017 03:39 PM

    President must now take a decision to request the PM and Ravi to step down for the sale of good governance until the conclusion of the case as these two will never resign. via DM Android App

    Damian Tuesday, 01 August 2017 03:40 PM

    Now this is getting disgusting. These rogue's have been stealing the Private sector employees hard earned funds. Yet I doubt weather people still realize how this directly effects them. If the law of the land doesn't get them may they get what is due to them by the law of "natural justice".

    saman Tuesday, 01 August 2017 04:18 PM

    Jayalath cannot give excuses. Since he was the head of this division he should have known details of transactions with a such a magnitude. He is not fit enough to hold a position of Assistant Governor at central Bank.

    dulan Tuesday, 01 August 2017 04:37 PM

    Everyone collided now that bird Anika sang all are singing. Cabral is laughing all the way to his Bank

    ceylon Tuesday, 01 August 2017 11:49 PM

    why this new case came first and all other casess are nowhere to see . via DM Android App


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