Sat, 19 Jun 2021 Today's Paper

1.6 bn avoidable loss incurred in Bond auctions: AG

14 June 2017 07:20 am - 6     - {{hitsCtrl.values.hits}}

A A A

The Auditor General’s report submitted to parliament stated that relevant authorities at the Central Bank should be responsible for a loss totaling Rs.1.674 billion, the Auditor General Gamini Wijasinghe said yesterday.

The losses which were deemed ‘avoidable’ in the report, was in reference to the two Bond Auctions which took place on February 27, 2015 and March 29, 2016.

The revelation was made during the continuation of evidence led by Deputy Solicitor General Priyantha Navana before the Presidential Commission for the Controversial Bond Issuances. Giving evidence the Auditor General said that the net profit gained by the Perpetual Treasuries Ltd during April 1 to August 31, 2016 was amounting to Rs. 5867 million.

When delivering his evidence over the Bonds Auction held on March 29, 2016, the Auditor General explained that the value of the bids offered by the CBSL initially at the auction was Rs. 40 billion but had unusually accepted Rs. 77.732 billion bids exceeding Rs.37.732 billion.

However, the Funds requirement of the Government at the time was around Rs. 80 billion.

He moved that the decision to raise funds solely from the Bond auction was irrational because it could incur financial losses to the CBSL in various ways.

The CBSL could have stopped accepting bids at the Rs. 40 billion cut out and raise other funds requirements of the Government through using Direct Placement Method.

When questioned by the commission Auditor General said if the DPM was not available the CBSL could have stopped the accepting bids at Rs. 40 billion cut out in the auction and go for another auction later within a week to raise other funds requirement.

And he said the OD facilities of BOC and People’s Bank could have used to manage the process until the second auction, because the funds were required to the Government by April 2.

Commenting on the participation of the Employee’s Provident Fund in the bond market, the Auditor General also said according to his findings that the EPF had invested only in the secondary market at lower interest rates despite its availability in investing at primary market at higher interest rates. However, when questioned by the Commission it was revealed that such decision is identified as a complex one to the EPF authorities.

On the other hand, at the cross examination conducted by Nihal Fernando PC and Counsel Romali Tudawe the Auditor General was asked to answer on some theoretical questions regarding Treasury Bonds and the methods he used in loss calculations.

It was seen that the Auditor General was uncertain at some points responding to the questions during the cross examination.

Subsequently, considering the significance of his evidence, the president of the Commission SC Justice T. Chitrasiri advised the Auditor General to avoid subject matters that he does not have expert knowledge and to reply with great attention to the questions, because contradictory responds would be a reason to set aside the whole evidence of him.

Meanwhile, the Commission yesterday requested the Auditor General to inquire and prepare a report on transactions taken place in the Secondary Market regarding the issuances of Bonds in the Primary Auctions held during February 1, 2015 to March 31, 2016 by the CBSL.

Earlier, it was revealed that the CBSL had failed to provide details regarding the secondary market transactions in order to calculate more possible losses due to the controversial bond issuances.

The Commission did so with the intention of examining any further financial losses to the State or any other public body.

The decision was made acceding the application made by the Attorney General’s Department while the objections, which were based on the mandate given to the Commission were also overruled.

The objections were raised by the counsel who appeared on behalf of the Perpetual Treasuries Ltd and the Former Governor.

The Commission which was appointed by the President comprised Supreme Court Judges Kankanithanthri T. Chitrasiri, Prasanna Sujeewa Jayawardena and former Deputy Auditor General Kandasamy Velupillai to inquire into the Treasury Bond issue will resume today. (Shehan Chamika Silva)

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

  Comments - 6

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

 
  • dupath miniha Wednesday, 14 June 2017 06:33 PM

    Let's begin to prosecute all the culprits , requesting a another investigation for Ajith Cabbral for hedgeing oil and buying Greek bonds, cause tax payers billions of ruppes.Wanted to know who authorized him to do hedging, does he have previous experience etc.

    kan Wednesday, 14 June 2017 10:22 AM

    This is nothing compared to Rs 22bn loss by Sri Lankan Airlines.

    Kimbula Wednesday, 14 June 2017 10:37 AM

    Central bank bond issue is like as our mother use to say,WHAT HAPPEN IF WE GIVE THE FOX TO WASH THEMUTTON BOWELS.

    ceylon Wednesday, 14 June 2017 11:34 AM

    ok.then now enough talk.this reason is enough to prosecute to jail.stop all thibfs now and start prosecuting.any more talk means corruption. via DM Android App

    JAN Wednesday, 14 June 2017 11:54 AM

    Arrest all of those who did knowingly to down fall out economy CB officials responsible for the past down fall of all finance companies arrest all of them for favouritism via DM Android App

    Shelly. Wednesday, 14 June 2017 02:07 PM

    So many men and women keep on forwarding their veiws. But I keep my fingers crossed untill I listen to what Arjuna and and Prime Minister have to say. via DM Android App


Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment


Statistical blunders expose administrative weaknesses

Information helps save lives and during a pandemic a free-flow of vital, accu

Vavuniya tusker’s demise DID TOO MANY ‘COOKS’ SPOIL JUMBO’S RECOVERY?

On June 11 Sri Lanka lost another one of its magnificent tuskers that succumb

Life and Times of Dynamic “Thamby” Arumugan Thondaman

Thamby”in Tamil means younger brother. It is also used widely as a pet name



See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.