The Central Bank of Sri Lanka has failed to provide information on secondary bond market transactions despite several requests made by the second COPE committee that inquired into the Treasury bond issue, Deputy Minister Dr. Harsha de Silva yesterday said. Dr. de Silva said so, while testifying before the Presidential Commission inquiring into the Treasury bond issue, yesterday. “When the COPE committee requested information on the secondary bond market transactions, the Central Bank told us that they did not have information regarding it, Dr. de Silva said. “We wanted to follow the trail of the treasury bonds sold in the primary market. Since we did not receive this information, we were not able to proceed with the COPE committee’s investigation regarding secondary bond market transactions. This is the reason why we have demanded for a forensic audit done on the secondary bond market from 2008 onwards.” Dr. de Silva pointed out.
Replying to a question directed by Commissioner, Supreme Court Justice P.S. Jayawardena, Dr. de Silva said the COPE committee requested for this information in late 2016. “We made these requests not just once but on several occasions,” he said.
Dr. de Silva also said that, as far as he recalls, the COPE committee forwarded this request to both former Governor Arjun Mahendran and the present Governor Dr. Coomaraswamy. It was pointed out at the Commission that the Central Bank in fact had these requested details in their Central Depositary System.
Dr. de Silva was again made aware by the Commission that the Central Bank indeed had this information in possession.
Justice Jayawardena asked Dr. de Silva if he is aware that the first COPE committee requested for the same information from the Central Bank, to which Dr.de Silva said he is not aware of such a case.
Meanwhile, Dr. de Silva was examined by Senior State Council Dr. Avanti Perera, regarding a telephone call he received on February 27 2015, the day on which the questioned auction took place. Dr. Perera questioned if Dr. de Silva received a telephone call from a Primary Dealer regarding the questioned auction to which Dr. de Silva said replied that he did receive an informal complain from a Primary Dealer saying that ‘something fishy is going on at the Treasury bond auction held on that day.’
Asked as to what he did following this conversation, Dr. de Silva said he contacted former Governor Arjun Mahendran and alerted him on the concerns expressed.
“I met Mahendran in the evening and raised the same concerns. Mahendran told me that he also has received the information, and that he does not think there would be any issue,” Dr. de Silva said.
Senior State Council Dr. Avanti Perera then read out certain portions of statements made by Dr. Harsha de Silva at the COPE committee proceedings and requested to confirm if he had made those comments. Dr. de Silva answered in affirmative when Perera read out the statements. Dr. Avanti Perera read out the following statements which were in Sinhala.
Dr. Perera: (reads out from the first statement) “I quote, ‘this person, is accused of shady transactions in the financial market even before his father-in-law became the Governor of the Central Bank.’ Who do you refer to as ‘this person’?”
Dr. Harsha de Silva: “Mr. Arjun Aloysius.”
Dr. Perera: “of the Perpetual Treasuries Limited?”
Dr. Harsha de Silva: “Yes.”
Justice Jayawarden: “Who do you refer to as ‘the Governor of the Central Bank’?”
Dr.Harsha de Silva: “Mr. Arjun Mahendran.”
Dr. Perera: (reads out from the next statement) “I quote ‘what I want to point out is that, we cannot reach a conclusion that the whole transaction was based on this father-in-law and son-in-law relationship because this person has been involved in things like these for a long time. He must have received insider information from somewhere.’ So who do you refer to as ‘he’?”
Dr. Harsha de Silva: “Mr. Arjun Aloysius.” Dr. Perera: (reads out the last statement) “I quote ‘there must be more people involved in this. This is a transaction running beyond the relationship of a son-in-law and a father-in-law.’ Can you confirm this is what you said?”