Arjuna Mahendran questioned at Bribery Commission

The Bribery Commission has recorded a statement from the Governor of the Central Bank of Sri Lanka, Arjuna Mahendran, in connection with the treasury bonds issue.

Mr Mahendran gave a statement at the Commission to Investigate Allegations of Bribery or Corruption from 9.00am to 3.30pm today, his lawyers said.

The Sri Lankan-born international banker was appointed to the helm of the central bank in January, after Maithripala Sirisena was elected as President.

Mr Mahendran has been in the spotlight recently due to the controversy surrounding a Treasury bond issue by the Central Bank of Sri Lanka (CBSL).

There had been rising concerns in bond markets over controversial deals made by Perpetual Treasuries, a firm connected to Arjun Aloysius, the son-in-law of Governor Arjuna Mahendran.

In March, the President appointed a three-member committee to investigate alleged irregularities surrounding the bond issue.

The money markets were in an uproar on February 27 when the CB announced it was accepting bids worth Rs. 10 billion at 9.50-12.50 per cent whereas clients and most primary dealers had made bids between 9.50 and 10.50 per cent, not in the 11-12 per cent range. Only a few bids, including those by Perpetual Treasuries were made in the 12 per cent range.

The JVP had called for the Governor to step down until the probe launched into the bond issue is concluded.

However, Prime Minister Ranil Wickramasinghe informed the Parliament that same week that Mahendran will be on leave until investigation on the treasury bonds issue is concluded.