Bond Scam: Ranil No Longer Has Immunity, & Mahendran Will Be Brought Back

by Zulfick Farzan 01-10-2024 | 2:16 PM

COLOMBO (News 1st); Minister Vijitha Herath, the Cabinet Spokesperson, has announced that the Public Security Ministry has commenced legal investigations into the Central Bank Treasury Bond Scam.

The investigations will also take into account the findings of the Presidential Commission of Inquiry and the Parliamentary Select Committee, with legal action to follow based on these reports. Preliminary steps have already been taken in this regard.

Minister Herath indicated that the justification given by Former Central Bank Governor Arjuna Mahendran for leaving the country, ostensibly to attend a wedding, may no longer be valid. Efforts are underway to facilitate his return to Sri Lanka.

Furthermore, Minister Herath highlighted that former President Ranil Wickremesinghe no longer enjoys presidential immunity. The case against him did not proceed earlier due to the constitutional immunity he held. With this immunity now lifted, the government has the authority to bring him before a court of law.

"We now have the power to bring him before a court of law. Let’s see what unfolds," Minister Herath stated at the press conference to announce decisions reached by the cabinet of ministers.

The Central Bank of Sri Lanka (CBSL) bond scam, also known as the CBSL bond scandal, refers to a major financial fraud that occurred on February 27, 2015. The scam involved the issuance of government bonds by the Central Bank under the leadership of then-Governor Arjuna Mahendran.

The CBSL advertised the sale of Rs. 1 billion in 30-year government bonds at a coupon rate of 12.5%. However, the auction ended up accepting bids worth Rs. 10 billion, significantly more than the advertised amount.

Perpetual Treasuries Limited, a primary dealer in the bond market and owned by Mahendran’s son-in-law Arjun Aloysius, was a major beneficiary of the bond issuance

The scandal led to multiple investigations, including a forensic audit and inquiries by the Presidential Commission of Inquiry and the Parliamentary Select Committee. These investigations found significant irregularities and recommended legal action against those involved.