The Central Bank has completed the on-site examination on the primary dealer, Perpetual Treasuries Limited and the Monetary Board has taken 'some' actions against the company in two instances within a month, according to the Central Bank Governor Indrajit Coomaraswamy.
At the beginning of this month, Dr. Coomaraswamy told reporters that the Monetary Board had begun to study the on-site examination report on Perpetual Treasuries for appropriate regulatory actions.
“The on-site examination of Perpetual Treasuries has been completed and the Monetary Board has considered the examination and the Monetary Board took action on the November 07 and it took further action last Friday, November 25. But at this point, I am afraid I can’t give you any details of the actions that we have taken for various reasons. But I can assure you that some action has been taken (and) in due course, you will become aware of those actions,” said Dr. Coomaraswamy.
The financial markets were livid when a leaked on-site report prepared by the Central Bank on Perpetual Treasuries, on which allegations of bond auction rigging had been levelled at, revealed that the primary dealer had made thumping profits.
A week before the report was leaked, Perpetual Treasuries Limited reported extraordinary higher profits of Rs. 960 million and Rs. 5.1 billion for financial years 2014/15 and 2015/16, respectively, much higher than the profits earned by some of the mid-sized commercial banks in the country.
The company is connected to the Son-in-law of the former Central Bank Governor, Arjuna Mahendran, who was implicated in the report prepared by the Committee on Public Enterprises (COPE), the parliamentary select committee appointed to look into the controversial bond auction, of wrongdoing.
The Central Bank’s probe on the alleged bond scandal was independent but they earlier said they would study the COPE report as well as the initial findings made by the 3-member committee appointed by the Prime Minister last year to look into the scandal.
Despite the actions that are said to have been taken, Perpetual Treasuries Limited continues to operate as a primary dealer.
The Central Bank recently set up an enforcement division with the objective of prosecuting the wrongdoers more aggressively.