Phone records reveal Aloysius had inside info on bond bids

By Himal Kotelawala

Recordings of telephone conversations between key individuals connected to controversial bond transactions under investigation have revealed that former Perpetual Treasuries Ltd. (PTL) Director Arjun Aloysius had access to sensitive inside information pertaining to at least one auction.

The Presidential Commission of Inquiry (CoI) appointed to investigate the alleged scam yesterday heard three recordings, two of which seemed to suggest Aloysius had been privy to confidential information obtained from an unnamed source, based on which he had issued instructions to PTL CEO Kasun Palisena on 29 March 2016 on how to place bids.

Testifying before the commission, PTL Chief Dealer Nuwan Salgadu said CEO Palisena had asked him to obtain a copy of the latter’s statement to the Committee on Public Enterprises (COPE) headed by D. E. W. Gunasekera from a prominent female UNP politician’s son, as confirmed by the first recording.

The second call made on 29 March 2016 at 9.18 a.m. originated from Palisena, according to Salgadu, through his mobile phone in Singapore. Aloysius had been in close proximity to Salgadu at the time. In his testimony, Salgadu said having passed his mobile phone to Aloysius, he moved out of the room as he did not wish to be part of the conversation.

“I understood that it was illegal things that were talked,” he said.

Asked by Commissioner Prasanna Jayawardena if he knew Aloysius had been in possession of illegal insider information that day, Salgadu answered in the affirmative.

Seeking further clarification, Jayawardena asked Salgadu if there had been instances in the past where he had reason to believe Aloysius was privy to information that he himself did not have access to. Salgadu said Aloysius would “know about decisions being taken at bankers’ meetings.”

Salgadu confirmed to the commission that he knew an auction was afoot the day of the call (29 March 2016).

Having listened to the recording, the commission enquired whether it was accurate that Aloysius, having already ceased to be head of PTL, was still “running the show”, instructing Palisena on key decisions.

The information relayed to Palisena on that call, it was revealed, was used for that day’s auction.

Concerning the second call, which also originated from Palisena through an International Roaming connection, at 9.34 a.m. the same day, the commission enquired whether Aloysius had received information relating to the bids of the Employment Provident Fund (EPF) and National Savings Bank (NSB) - information, the commission stressed, he was not entitled to.

Noting that it was clear after listening to the call that Palisena had written down direct instructions from Aloysius, Jayawardena asked Salgadu how Aloysius would have known how much EPF had planned on bidding, to which he said “he probably had people.”

Asked how Aloysius would have known at what rate the Central Bank would have accepted and where the recommendations usually came from, Salgadu said it’s the Public Debt Department’s task, with the Central Bank Governor having the final say.

During cross questioning, responding to a question about whether PTL made profits of approximately Rs. 11 billion between 2015 and 2016 (the second highest profit-maker had only made Rs. 500 million, it was revealed by the commission) due to having received confidential information, Salgadu again responded in the affirmative. 

Referring to the approximately 100 call recordings deleted, as reported in Tuesday’s edition of Daily FT, Salgadu said he had them deleted under the instructions of Palisena as they would have had an impact on both the company and the CEO. PTL lawyers questioned Salgadu’s credibility as a witness due to the deletion of files but he maintained that it was done only after consultation with Palisena.

Salgadu also expressed security concerns for himself and his family and a threat assessment for witness protection will likely be made if necessary.