Forensic audit report on bond scam has exposed explosive findings on irregular investments allegedly made on the directions of the then Central Bank Governor Ajith Nivard Cabraal during the period 207 to 2015.
In the Forensic audit report now in the public domain has clearly indicated the action of the then CB management in stock market playing with the money of over 17 million private-sector employees.
Sri Lanka’s EPF has grown to a significantly huge fund with an asset base nearing Rs. 3,000 billion with over 18 million accounts.
EPF has invested in 19 companies in the stock market directly during Cabraal's period violating the stipulated limit of 2 per cent of investments
.Insome instances it has invested 10,30 and 40 per cent in shares of those companies without the consent of the monetary board.
The BDO India report said that in investments through direct placements, during January 1, 2003, and February 28, 2015, with the tender value of Rs.3,554 billion,
Out of 2,673 Direct Placements by the PDD (tender value Rs. 5,888 billion), the EPF has not made any investments in approximately 60 per cent of total offered by the PDD.
A massive loss of Rs 8.7 billion has incurred by the Fund, a from off-auction direct placements made by the central bank at rates below the market, a forensic audit has estimated.
The report said the EPF had been made to buy bonds below the previous auction average or below the secondary market rates between 2007 and 2015 by the Public Debt Department of the Central Bank.
“In 94 out of 346 instances, the PDD offer yield rate was lower than the Secondary Market yield rate,” the forensic report revealed.
“There was no previous Auction conducted two weeks prior to the placement arranged on the date in 346 placements made. Hence the secondary market rate was compared.
“Due to a lower yield rate, the EPF had incurred a loss of Rs8,716 million.”
Sri Lanka may have lost up between Rs. 9.9 to 10.4 billion in over 1,100 direct placements of bonds made by-passing auctions, between 2005 and 2015, a forensic audit has estimated.
(LI)