Aloysius requested me to 'conceal vital info.' : witness

The Pan Asia Bank (PABC), Deputy General Manager R. A. B. Dias today said that the owner of Perpetual Treasuries Ltd, Arjun Aloysius, had asked him “to conceal vital information” when testifying before the Presidential Commission of Inquiry.

The revelation was made when the witness was questioned by Deputy Solicitor General Milinda Gunathilake regarding the previous testimony he gave about Mr. Aloysius’ request prior to him giving evidence before the PCoI.

The solicitation had been allegedly made during a meeting, which took place on June 30, 2017 at the residence of Mr. Aloysius, with whom the DGM of the PABC was with.

Earlier, it was revealed that the witness had visited Mr. Aloysius' residence subsequent to the continuous phone calls made by Mr. Aloysius demanding a short meeting with the witness prior to his testimony at PCoI.

“Mr. Arjun phoned me on June 30 and was pleading to meet me, and I also wanted to meet him to get certain clarifications. When we met he said the next two weeks are crucial to him, therefore he needed my support at the PCoI proceedings ”, the witness said in his earlier evidence.

Meanwhile, during the cross- examination led by Mr. Nihal Fernando PC and Counsel Romali Tudawe, the witness exposed certain matters regarding the Bonds that were sold to the EPF in the secondary market, where PABC acted as an intermediary.

According to the witness, during the intermediary process, the PABC had also sold Rs. 8.5 billion worth of Government Securities of its former chairman, Nimal Perera, and the securities belonging to his private company called ‘NP Capital’ to the EPF.

The amount was in relation to only 32 secondary market transactions, on which PTL lawyers had been cross examining the witness.

He explained that Mr. Nimal Perera had pre-arranged the rates and prices at which the bonds would be sold to EPF. ‘He had negotiated with the EPF dealer, Saman Kumara directly about the rates and had informed PABC to confirm them and continue with the deals’, he said.

The PABC was handling the portfolio of its Chairman in the secondary market transactions.

When questioned by the Commission, the witness explained that apart from its former chairman, there were five clients of the PABC who had sold Bonds to the EPF, where PABC acted as an intermediary.

Navara Capital, Virtual Investments, Tradies Holding, Vitavel Private Ltd and Trillion Securities were the companies which had dealt with PABC when selling bonds to the EPF in the secondary market.

Acceding to the commission’s request, the witness agreed to provide details about the directors and shareholders of those companies for the perusal of the PCoI.

It was explained that these clients of PABC had also sold bonds to the EPF at a rate similar to Mr. Nimal Perera’s rates in selling bonds to the EPF.

He said that its dealers were negotiating with the EPF on behalf of its clients to decide on the rates.

The witness said that Mr. Nimal Perera and Perpetual Treasuries Ltd had sold bonds to the EPF at a pre-arranged higher rate through PABC, and based on that the PABC also traded with its other clients in the intermediary process.

The witness said that there was a manipulation in market rates because of the long term bonds. “If we set a batting wicket in a cricket match, the opposite team could also get the advantage of it, that is exactly what happened”, he said

He said the PABC gained only a nominal profit while the actual profits went to its clients during these transactions, where the PABC acted as an intermediary.

Consequent to the questions made by PTL counsel Romali Tudawe regarding the 32 specific secondary markets transactions, which were reflected in a marked document at PCoI, the witness said that the information relating to transactions between the PABC and its clients during the intermediary process was not reflected in the document due to the shortcomings of its back office officials.

However, he said the information would be available in the bank’s internal records if necessary.

Referring to a specific transaction, which had been recorded in the document, the counsel questioned the reason for the contradictory practice of recording, and the witness said that it was a mistake of the back office.

Re-examining the witness, the DSG told the commission that there was a pattern visible in the transactions where PTL sold bonds to the EPF through PABC because in such instances there were other clients of the PABC, who existed in between those transactions.

The Commission also permitted the DSG to submit a document prepared by the Attorney General’s Department depicting the alleged pattern derived from the document that contains a large amount of secondary market transactions. (Shehan Chamika Silva)