Monetary Board verdict on bond scam soon

• Monetary Board begins deliberations on findings of on-site report on Monday
• Meeting again to discuss further this Friday
• CB expected to issue a statement once Monetary Board decides future course of actions
• Central Bank probe to remain independent, but would study COPE and  Pitipana report

From left: Deputy Governor S. Lankathilaka, Governor Indrajit Coomaraswamy, Deputy Governor Nandalal Weerasinghe and Economic Research Department Director Mahinda Siriwardana. 
Pic by Pradeep Pathirana

The Monetary Board is soon expected to come up with its verdict on the alleged treasury bond scam based on an on-site report prepared by the Central Bank officials, which is now being deliberated by the Monetary Board.

To this end the, Monetary Board on Monday for the first time began to study the on-site examination report on Perpetual Treasuries Limited and it will meet on Friday for the second time for the week to further deliberate the report, said the Central Bank Governor, Indrajit Coomaraswamy.   
 “That report was presented to the Monetary Board yesterday and (we) had a discussion on that report.

It (report) has requested the various departments of the Central Bank to undertake more work in specific areas to enable the Monetary Board to take an informed decision (and) as to what the Monetary Board should do in relation to the finding of the on-site report.
 The board will have another meeting on Friday to discuss this further,” Dr. Coomaraswamy told a press briefing yesterday.  The Central Bank is expected to issue a statement once the Monetary Board decides on the future course of action related to the on-site report.

The country’s financial market was stunned by the findings of a leaked draft report on the activities of the primary dealer in question—Perpetual Treasuries—by the Central Bank, where it was stated that Perpetual Treasuries made a Rs.5 billion profit in just two months trading in government securities.
The Central Bank later acknowledged the ownership of the report.
Before that, the published accounts of Perpetual Treasuries showed the primary dealer raking in a profit of Rs.5.1 billion for the financial year 2015/16 against Rs.960 million in the previous year, much higher than the profits earned by a mid-sized commercial bank in the country.
Last week, the Committee on Public Enterprises (COPE) presented its findings on the alleged bond scam and said that former Central Bank Governor, Arjuna Mahendran, who is the father-in-law of the ultimate owner of Perpetual Treasuries, was directly responsible for the scam and recommended legal action against him.
According to Dr. Coomaraswamy, the Central Bank’s probe on the alleged bond scandal would continue independently, but they would study the COPE report as well as the initial findings made by the three-member committee appointed by the Prime Minister last year to look into the matter.
“My understanding of the Monetary Board is that they want to follow the evidence as they come out in an objective way,” he stressed.
When the Monetary Board meets on Friday it will evaluate the powers vested with the Central Bank as to what actions could be taken by them on the findings of the on-site report.

Meanwhile, in another development, the Central Bank has also set up an enforcement division with the objective of bringing the wrongdoers to book more persistently.    
“We want to aggressively prosecute the wrongdoing. Perhaps the Central Bank could have done a bit more on that front. So we really want to change the whole culture there,” the Governor explained.
The newly setup enforcement division will also resolve some of the outstanding issues.  
“We want to be more persistent and concerted in our efforts to prosecute wrongdoing,” he added.