The Attorney General has sought a directive from Chief Justice Jayantha Jayasuriya to indict 10 suspects in connection with the 2015 Treasury bond scam, including the former Governor of the Central Bank Arjuna Mahendran, and his son-in-law Arjun Aloysius, the Office of the Attorney General said in a statement released yesterday.
In an unprecedented move, the Attorney General’s Department issued a media release, announcing that the indictments had been sent to the Chief Justice for direction, and the constitution of a trial-at-bar at the Colombo High Court to institute criminal proceedings against the suspects implicated in the controversial bond auction.
“No sooner the directive is received from the Chief Justice, the Attorney General will file indictments on 23 counts against 10 suspects,” Coordinating Officer to the Attorney General State Counsel Nishara Jayaratne said in the media release.
State Counsel Jayaratne’s media release referred to the bond scam as the “largest organized financial crime perpetrated in this country by any person or persons which had an impact on the Financial Markets and the country’s economy.”
The Attorney General had referred the matter the Chief Justice for the constitution of a trial at bar at Colombo High Court to hear the criminal proceedings “having considered the nature and gravity of the case,” State Counsel Jayaratne said. Prosecutors had adopted a painstaking approach to study “thousands of pages of evidence and thereafter consider and present charges against the accused,” she added. Mahendran, the former Deputy Governor of the Central Bank P. Samarasiri, Aloysius and seven other directors of Perpetual Treasuries Limited (PTL), the primary dealer at the centre of the controversial treasury bond auction on 27 February 2015, are to be indicted on 23 counts, including criminal misappropriation and criminal breach of trust under the Penal Code, Public Property Act and the Registered Stocks and Securities Ordinance.
Lakshman Arjun Mahendran, CBSL's former deputy governor Paththinige Samarasiri, the Perpetual Treasuries Ltd, Arjun Joseph Aloysius, Kasun Oshadhee Palisena, PTL directors Jeffery Joseph Aloysius, Pushya Mithra Gunawardane, Chitta Ranjan Hulugalla, Muthuraja Surendran and Ajahn Gardier Punchiheva will be indicted by the Attorney General in connection with the bond scam.
The suspects will be indicted in connection with the charges arising from the Treasury Bond auction held on 27 February 2015 (in respect of the face value of Rs. 10.058 billion) causing a Rs. 688 million loss to the Government, the release said.
The charges had been formulated based on evidence presented during the Bond Commission Inquiry, conducted by the Commission of Inquiry appointed by the President, and also considering the material disclosed during the investigation conducted by the CID, State Counsel Jayaratne said in the release. According to the Auditor General, the estimated avoidable loss suffered by the Government at this auction alone (on 27 February 2015) was approximately Rs. 688,762,100, the release noted.
More indictments were expected to be presented on the basis of the evidence revealed at the Bond Commission Inquiry and investigations conducted by the CID, the coordinating officer to the Attorney General said in her release to the media.
In October 2016, a Parliamentary Oversight Committee, the Committee on Public Enterprises (COPE), found Mahendran was “directly responsible” for the dubious bond transaction in February 2015 that allowed a company linked to his son-in-law to rake in approximately Rs. 10 billion in profits through bond auctions conducted by the Central Bank over a two-year period. The COPE report, which preceded the Presidential Inquiry on the Bond auction, also recommended legal action against Mahendran and other Central Bank officials implicated in the scandal.
The scandal has dogged the tenuous coalition Government of President Maithripala Sirisena and his Prime Minister Ranil Wickremesinghe, and became a major fault-line in the relationship between the two leaders since their first year in office.
(FT)