Sri Lanka’s Central Bank Governor says he is back at work

Sri Lanka's under-fire Central Bank Governor Arjuna Mahendran returned to work on Thursday after a long, 5-week absence following a scandal over a Treasury bond issue allegedly involving his son-in-law. “Yes, I am back at work,” the Governor told Times Online on Friday morning but declined to make any further comments. He went on leave on March 16 pending a probe by a 3-member committee of lawyers appointed by Prime Minister Ranil Wickremasinghe to report on allegations that a Treasury bond issue was clouded by insider trading and excessively high interest rates. At the February 27 bond issue, the Central Bank accepted Rs. 10 billion though Rs.1 billion was the advertised amount for subscription. Bond trader - Perpetual Treasuries Ltd, the family firm of Mahendran’s son-in-law, Arjun Aloysius, won 50 per cent of the bid raising suspicions of insider trading. The Governor rejected allegations of using influence in the process and took leave pending the probe, which the opposition says is a sham as the three members are lawyers affiliated to Wickremesinghe’s United National Party. The report, which according to Deputy Economic Planning Minister Harsha de Silva reveals that the Governor was not ‘directly’ involved but calls for a further investigation, is due to be presented in Parliament tomorrow. It was scheduled to be presented last Monday but was held back due to disruptions in the legislature over the proposed 19th Constitutional Amendment. High ranking government sources said that the Governor was given the clearance by the Government to return to work. Other sources said the Governor’s return is likely to be connected to the preparation and release of the Central Bank’s annual report for 2014, which is already delayed. In the past few years the report has been released in the week before the Sinhala and Hindu New Year. – ENDS -