PTL subdued during trades in the money markets
View(s):The Central Bank (CB) this week acknowledged that a confidential report on an internal probe on controversial bond trader Perpetual Treasuries Ltd (PTL) was an authentic copy though it had been unauthorised for public circulation. This was contrary to claims by some politicians including Finance Minister Ravi Karunanayake that it was a fake report On Monday the CB said the police had been asked to probe how the report, widely published in the Business Times and news websites, had leaked to the media. On Thursday afternoon (October 6), when Business Times senior journalist Bandula Sirimanna met the Finance Minister in the lobby of the IMF headquarters in Washington, Minister Karunanayake told him that “”the leaked report on Perpetual Treasuries is a fake and investigations aren’t warranted.” He further said that the Central Bank Governor “told me that the leaked report is (a) fake”.
However earlier (in the morning) on the same day, “Governor Indrajith Coomaraswamy told me (when I met) him that he had received a copy of the Sinhala version of the report. At no time did he say it was a fake,” journalist Sirimanna recalled. The Monetary Board was meeting on Friday afternoon (when this edition went to press) to discuss the report and decide on the next course of action. Dealers said PTL, whose profits have been much higher than some of the banks and towering over other traders in the bond and Treasury bill market, had been subdued this week. Dealers were also worried that the CB will over-react to the findings and impose stringent controls on the market which would kill speculative trading.
“Because of one errant dealer we are all suffering,” one dealer grumbled. The report published last week in this this edition showed that PTL had a phenomenal rise with post-tax profits surging to Rs.6.12 billion from Rs. 713 million within 19 months (as at May 31, 2016) while its capital base rose to Rs.11 07 billion from Rs. 1 billion in the same period. Even more revealing was the fact that while PTL’s capital base was reported at Rs 11.07 billion as at May 31, 2016, the capital base of other five primary dealers put together was only Rs. 8.2 7 billion, the report titled “Perpetual Treasuries Ltd – Findings of the on-site examination” has said.