SL Govt. prepared for Parliamentary probe on Treasury bond fiasco

The Sri Lankan Government, bowing to criticism over the composition of the probe committee into the controversial Treasury bond issue, said on Tuesday it was agreeable to the appointment of a Parliamentary Select Committee (PSC) if necessary. In a lengthy explanation in Parliament on the bond issue which saw Central Bank Governor Arjuna Mahendra taking leave pending the inquiry, Prime Minister Ranil Wickremasinghe said that --- if so desired and if the party leaders of parliament agree --- the Government was acceptable to a Parliamentary Select Committee being appointed. The Government has been criticized over the composition of the probe committee which the opposition and good governance activists say are lawyers connected to the United National Party, whose leader is Wickremasinghe. During his speech, the Premier vigorously defended the team members saying they were lawyers with wide experience. Parliamentary sources said the matter was likely to be taken up at the next meeting of party leaders. A PSC comprises parliamentarians representing all political parties in the legislature and appointed only for special occasions. Meanwhile the Central Bank on Wednesday announced that its Governor Arjuna Mahendran will be on “leave in Sri Lanka” during the period of inquiry into the 30-year Treasury bond issue. The reference to ‘leave in Sri Lanka’ is believed to in the context of criticism that Mr. Mahendran had travelled abroad last week to Singapore and Los Angeles and was due fly out this week while the probe was one. The CB statement said the Monetary Board has designated Deputy Governor P. Samarasiri as the Senior Deputy Governor. Mr. Mahendran went on leave on Monday, a development that was reported on Times-on-Line (ToL) on the same day. Serious questions have been raised over the bond issue as the authorities had accepted Rs.10 billion compared to the Rs.1 billion advertised and also at higher-than-market interest rates. One of the successful bidders was Perpetual Treasuries which secured half the accepted amount with Rs. 5 billion. The company is linked to Arjun Aloysius, son-in-law of the CB Governor triggering allegations of possible insider trading. Mr. Mahendran has vehemently denied any wrongdoing in the transaction. – ENDS -