Under-fire Central Bank Governor flies to Singapore, LA

Under-fire Central Bank (CB) Governor Arjuna Mahendran went abroad on Monday just as a probe began on a Treasury bond issue that has drawn allegations of insider trading and favouritism. CB officials said however it was a pre-arranged trip and that the Governor was visiting Singapore and Los Angeles on official work. He is expected to return by Friday and then leave the next day on another pre-arranged trip, they said. A Treasury bond issue in which the CB accepted Rs. 10 billion worth of bids at high rates of interest after advertising for Rs.1 billion created a furore in the market with demands for a probe. Both the Sri Lanka Freedom Party and the JVP demanded an independent investigation while President Maithripala Sirisena, currently on an official visit to the UK, appointed a 3-member committee to probe the matter. Both parties are backing demands for the CB Governor to step down, at least until the inquiry is over. Mr. Mahendran told the Sunday Times on Saturday that a lawyer had been assigned to carry out an independent inquiry. The allegation centres around the Governor’s son-in-law Arjun Aloysius being involved in the bond issue. Mr. Aloysius’s family Perpetual Treasuries, a primary market dealer, was the biggest beneficiary of the bond issue. – ENDS -