Tender Board had no option after Governor’s instructions: Ex-Asst. Gov

Former Assistant Governor, S. Sepala Rathnayake, who was also a member of the Tender Board dealing with the issuance of Treasury bonds, revealed today before the Commission that he was shocked due to the consequences that could arise, when the Board was required to accept Rs. 10.058 billion worth bids for the Treasury bond auction on February 27, 2015.

When questioned, he said at the Tender Board Meeting, the Superintendent of Public Debt Department explained to the Board members about the intervention of former Governor Arjuna Mahendran, as he had instructed the Public Debt Department (PDD) to accept 10 times the amount of bids advertised in the public notice.

It was explained that the February 2015 bond auction was originally intended to sell 1 billion rupees ($7 million) of 30-year bonds.

And following the auction, on the instructions of Former Assistant Governor Rathnayake, the PDD recommended to accept bids worth Rs. 2.6 Billion.

However, disregarding the recommendation of PDD to accept only Rs. 2.6 billion, the former Governor had unusually visited twice the PDD while the auction was taking place and had instructed to accept Rs. 10.058 billion amounts of bids.

It was also revealed, when the recommendation was before for the approval of the Tender Board, former Assistant Governor Rathnayake had rejected to accept such amounts of bids because of the consequences and the impact which could occur to the market interest and the public debt management.

‘At the Tender Board meeting, I asked the chairman of the TB to contact the Governor immediately to discuss the situation. Then the chairman, Mr. Samarasiri attempted to contact the Governor via the intercom telephone line but said that the Governor was not in the office’, he said.

Subsequently, the Chairman of the Tender Board had left the room and had come after few minutes, and informed the Tender Board members that he contacted the Governor and he was instructed to accept the so-called amounts of bid by the Governor.

‘I was dissatisfied with the response of the chairman and I expressed my stance by saying that ‘better to leave clothes here and go naked to sign this’, he had said it in the Sinhalese language to the Tender Board members.

Using economic statistical drafts prepared by him, former Assistant Governor also illustrated to the Commission the consequences that had actually occurred to the market interest, auctions for the T-bonds and bill and the loss for the Government, after the acceptance of the Rs. 10.058 billion worth bids on February 27, 2015.

Deputy Solicitor General Priyantha Navana led the evidence on behalf of the Attorney General today .Further inquiry will be conducted from April 3.

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