UNP MP files FR case against CB’s junk Greek bond investment

Wednesday, 8 August 2012 01:19 - - {{hitsCtrl.values.hits}}

By Chamitha Kuruppu

UNP Parliamentarian Sujeewa Senasinghe yesterday filed a Fundamental Rights case against the Central Bank Governor at the Supreme Court challenging the prudence of Greek bond investments.

Speaking to the Daily FT MP Senasinghe said, “I am seeking an interim injunction for them (the Central Bank) not to invest any more money on the Greece financial market and also to say that they do not have the official capacity to take this decision.”

Senasinghe also pointed out that knowing the financial crisis of Greek bonds, the Central Bank had bought those in the secondary market. “Already the loss is Rs. 2.45 billion at the moment,” he noted.

“We have taken the best action that could be taken at this time. Now they have to submit all documents to the courts. I have a very good case and I think the court will act independently and issue notice so it can be taken for trial,” he said.

The main opposition United National Party (UNP) has been constantly challenging Central Bank’s decision to invest in Greek Bonds as well as controversial dealings on the Colombo stock market via the EPF.

Oposition Leader Ranil Wickremesinghe once questioned in Parliament the decision to invest in Greek Bonds and the losses suffered which have been estimated at around Rs. 3.4 billion.

However in reply senior minister Sarath Amunugama told parliament that all bonds were purchased on 5 April 2011. He said that they reach maturity in 2015. The Euro Zone took a turn for the worse several weeks after the investment was made, and following the volatility, in mid July 2011, the Central Bank sold a part of Greece bonds with a face value of five million Euros at a loss of US$ 1.1 million. This measure was taken to mitigate the risk of the Greece investments losing further value due to subsequent developments in Euro Zone.