CB Chief, son-in-law issued notice to appear in court

The Colombo Magistrate Court yesterday issued notice on the Central Bank Governor Arjuna Mahendran and son in law Arjun Aloysius to appear in court on 30 October, over a petition filed regarding the controversial Treasury Bond issue.

The petition filed by UPFA Provincial Councilor Renuka Perera urged the courts to issue an order summoning the CB Governor and his son-in-law who is a major shareholder of Perpetual Holdings, in connection with the irregularities and advantage gained by the company in the Treasury Bond issue.

The plaintiff has informed the court that on or about 27 February 2015, an issue of 30-year Treasury Bonds valued at Rs 1 Billion was declared without publishing any public notification, and the Central Bank had increased this amount to Rs, 10 billion.

The petitioner further stated that as a result of this transaction the government incurred a loss of Rs. 1.393 billion.

The controversial Treasury Bond issue was declared on the 27th February 2015 by Central Bank. At the Treasury Bond Auction, the 30-year bonds were to be issued at a market rate of 9.5 percent to raise Rs.1 billion. The issue was however closed at 12.5 percent with the Bank accepting Rs.10 billion from Rs. 20.7 billion bids received.

It has been alleged that “insider trading” has taken place in the transaction in which the new Central Bank Governor Arjuna Mahendran’s son-in-law’s firm has been benefited.