Arjun Aloysius says wrongfully cited as respondent

Alleged bond scam

By Chitra Weerarathne

The Perpetual Treasuries Pvt Ltd and its Chief Executive Officer Arjun Aloysius, through their counsel told the Supreme Court yesterday that they had been wrongfully cited as respondents in the fundamental rights violation application filed by three petitioners against an alleged bond scam by the Central Bank and its Governor Arjuna Mahendran.

S. Parathalingam PC appeared for the sixth respondent, the Perpetual Treasuries Limited, while Nihal Fernando PC appeared for Arjun Aloysius, the son-in-law of the Governor.

Petitioner Dr Geedeck Uswattaratchi, an economist, Dr. Alagu Caruppiah, an Engineering Consultant and Dr. Chandra Jayaratne, one time Chairman of the Ceylon Chamber of Commerce have alleged an arbitrary issue of Treasury Bonds in favour of a family company owned by the family of Mahendran, his son-in-law being the Chief Executive Officer of that company.

Counsel Saliya Pieris, who appeared for the petitioners, said the main beneficiary of the bond issue held in late March 2015 was Perpetual Treasuries Limited. The counsel alleged lack of transparency on the part of the Central Bank, its Governor and connected respondents.

The Counsel said there should be transparency in the issue of bonds in the interest of the public. The petitioners were seeking transparency at Central Bank auctions.

The lack of transparency at the Central Bank was in violation of Article 12(1) of the Constitution of Sri Lanka. The matter needed scrutiny by the Supreme Court, Counsel Saliya Pieris argued.

When the government debt went up, the citizens were affected, he said.

Counsel Pieris said that out of the Rs. 10 billion Treasury Bonds auctioned, five billion had been issued in favour of Perpetual Treasuries Pvt Limited.

Counsel K. Kanag Ishwaran P.C., who appeared for the first respondent, the Central Bank of Sri Lanka, said that the averments made in the petition were without any legal basis. Leave to proceed should not be granted.

In answer to a question by the Chief Justice, Counsel Pieris said that the notice of the auction of March 27, 2015 given to the public and the primary dealers had been deviated from at the auction. That had been an arbitrary practice.

Counsel Pieris added that there had been a tenfold increase in the amount auctioned. It was highly suspicious. The issue had to be inquired into by the Supreme Court.

K. Kanag Ishwaran PC said the seventh respondent Perpetual Treasuries had been a primary dealer since 2013. Counsel Nihal Fernando PC endorsed the same. Auction business had been permitted to primary dealers, Counsel Kanag Ishwaran said.

It had not been done capriciously, he added. The petition did not point to breach of law by the Central Bank, he submitted.

The Bench comprised Chief Justice K. Sripavan, Justice Priyasarth Dep and Justice Rohini Marasinghe.

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