Travel ban imposed on Ravi K and 10 others, Magistrate to rule on arrest warrants tomorrow

• Former Minister Karunanayake, 10 others face charges of misappropriation, market manipulation, cheating, and insider dealing at bond auctions
• AG officials make submission to Court seeking arrest warrants for all suspects including Directors of Perpetual Treasuries
• Karunanayake faces charges of conspiracy, dishonest misappropriation

By Chandani Kirinde

Colombo Fort Magistrate Ranga Dissanayake yesterday imposed a travel ban on former Minister Ravi Karunanayake and 10 others, including all the Directors of Perpetual Treasuries who are facing charges of criminal misappropriation, market manipulation, cheating and insider dealing in relation to two bond auctions held in March 2016.

The Magistrate also said he would rule tomorrow on whether to issue arrest warrants for the suspects   after the Attorney General’s Department made submissions seeking a court order to arrest the 11 suspects who face charges under the Penal Code, Offences against Public Property Act and the Registered Stock and Securities Ordinance in connection with two bond auctions held on 29 and 31 March 2016. 

Ravi Karunanayake

Senior Deputy Solicitor General Haripriya Jayasundara said that the AG’s Department had examined the evidence contained in the report of the Presidential Commission of Inquiry appointed to Investigate, Inquire and Report on the Issuance of Treasury Bonds during the period from 1 February 2015 to 31 March 2016 as well as the reports of Police investigations made into a complaint lodged by former Central Bank Governor Indrajit Coomaraswamy and there was reasonable suspicion that the 11 suspects named were involved in misappropriation, cheating, insider dealing and market manipulation in the two bond auctions held in March 2016.

Along with the company Perpetual Treasuries Ltd, the AG has named Ravi Karunanayake, Arjuna Mahendran, Arjun Aloysius, Kasun Palisena, Geoffrey Joseph Aloysius, Ranjan Hulugalle, Muthurajah  Surendran, Ajahn Gardiye Punchihewa, Buddhika Sarathchandra, Indika Saman Kumara and Sagarapillai Padumanathan as suspects. Former Minister Ravi Karunanayake is facing charges under the Penal Code for conspiracy to commit or abet in an offence with Perpetual Treasuries Ltd. and dishonest misappropriation of property under the Offences against Public Property.

Jayasundera stated that investigations had revealed that Karunanayake, who was Finance Minister at the time the bond auction took place, had pressured officials of the three State banks, namely People’s Bank, Bank of Ceylon and National Savings Bank, and instructed them to bid at lower rates at two bond auctions in late March 2016 with the assurance that other bids at higher rates would not be accepted. However, bids made by Perpetual Treasuries on both occasions had been accepted, allowing them to make a profit of over Rs. 55 million within days of the auction by selling them in the secondary market to the Employees’ Provident Fund (EPF).

She sought warrants for the arrest of all the suspects, but the Magistrate said he would rule on the matter on Friday as there were different charges against each of the suspects and he would need to study them individually.

Perpetual Treasuries Ltd, its owner Arjun Aloysius and nine others except for Mahendran and Sarathchandra are also facing charges under 56(A) 1(a) of the Registered Stock and Securities Ordinance    for failing to comply with the provision of the ordinance as well as for acting in violation of the Code of Conduct issued for Primary Dealers by the Central Bank by engaging in insider dealing as well as market manipulation to secure an unfair advantage at bond auctions.

Senior State Counsel Lakmini Girihagama and State Counsels Udara Karuntillake and Chathuri Wijesuriya appeared with Senior DSG Jayasundera for the State.