Supreme Court revives Treasury Bond charges against Perpetual Treasuries, others

Colombo, June 1 (Daily Mirror) - The Supreme Court today set aside a High Court-at-Bar order that had discharged several accused including  including Perpetual Treasuries Ltd., former Central Bank Governor Arjuna Mahendran from key charges in the Central Bank Treasury bond issuance case and ruled that a company can be prosecuted under the Offences Against Public Property Act. 

The judgment was delivered by a five-judge bench comprising Chief Justice Preethi Padman Surasena, Justice Shiran Gooneratne, Justice Achala Wengappuli, Justice Mahinda Samayawardhena and Justice Arjuna Obeyesekere. 

Following the Supreme Court’s judgment, the High Court-at-Bar will have to recommence the trial. The Supreme Court, in its judgment, also reminded the Judges of the High Courts-at-Bar that trials should be conducted on a day-to-day basis unless exceptional circumstances warrant otherwise.

The Supreme Court emphasized that the case involved issues of immense public importance (treasury bond issuance), given the allegations of financial losses amounting to billions of rupees and the broader impact on the national economy. The Supreme Court held that Perpetual Treasuries Limited can be prosecuted under the Offences Against Public Property Act. 

The Offences Against Public Property Act (No. 12 of 1982) is a strict law in Sri Lanka designed to protect state and institutional assets. It criminalizes theft, robbery, mischief, and financial corruption (such as fraud, forgery, or criminal breach of trust) involving public property

The apex court allowed the appeal filed by the Attorney General and overturned the High Court-at-Bar's order dated December 6, 2021, which had discharged all accused from counts 1 to 11 of the indictment.
This appeal relates to the controversial Treasury bond auction held on March 31, 2016, one of three high-profile bond issuance prosecutions involving allegations of massive losses to the State. The indictment names ten accused, including Perpetual Treasuries Ltd., former Central Bank Governor Arjuna Mahendran, PTL beneficiary owner Arjun Aloysius, former Finance Minister Ravi Karunanayake, PTL Chief dealer Kasun Palisena, PTL chairman Geoffrey Joseph Aloysius, PTL directors Chitta Ranjan Hulugalla, Muthurajah Surendran, Ajahn Gardiye Punchihewa and Indika Saman. 

Justice Mahinda Samayawardhena, delivering the judgment, observed that a corporation could be held criminally liable for offences committed through those who control and direct its affairs. The Court observed that although a company cannot be subjected to imprisonment, it can nevertheless be punished through the imposition of a fine where the law permits such a penalty.

The Supreme Court further found that the High Court-at-Bar had erred in law by concluding that Perpetual Treasuries Ltd. could not be indicted under the Public Property Act.

The High Court-at-Bar had upheld a preliminary objection raised by the defence that Perpetual Treasuries Ltd., being a corporate entity and not a natural person, could not be charged under the Offences Against Public Property Act. Consequently, the Court discharged the company from charges of conspiracy and criminal misappropriation of Treasury bonds and also discharged the remaining accused from related aiding and abetting charges.
However, the Supreme Court held that there was no legal impediment to prosecuting a company under Section 5(1) of the Offences Against Public Property Act read with the Penal Code.