Second bond scandal costs EPF dear – JVP


JVP trade Union Wing Leader KD Lalkantha, Propaganda Secretary Vijitha Herath, Convener of the Voice Against Corruption Wasantha Samarasinghe addressing media at the press conference.

The JVP yesterday said a Central Bank racket had resulted in a huge loss to the Employee’s Provident Fund (EPF).

Addressing a press conference held at party headquarters former JVP MP cum convenor of the Anti-Corruption Voice, Wasantha Samarasinghe alleged that a company owned by a person close to the Central Bank Governor Arjuna Mahendran was involved in the scandal.

Samarasinghe said losses incurred by the EPF due the scandal must be the biggest issue to be addressed on May Day. "Immediately after the change of government last year, the Central Bank advertised its intention to sell Treasury bonds worth Rs. 1,000 million and sold bonds worth Rs 10,000 million at a higher interest to a company owned by the present Governor’s son-in-law. When the racket was exposed President Maithripala Sirisena ordered that Central Ban Governor be removed. But, the Wickremesinghe government did not follow the presidential order. Now, a second scandal has taken place under the watch of the same Governor."

Samarasinghe said the latest bond auction scandal had taken place when 2,030 bonds (for over 14 years) were sold for Rs. 28.9 billion at an average yield of 14.23 per cent on March 29, sharply higher than the 11.66 per cent at an auction on February 05, after originally asking for 20 billion. But only Rs. 10 billion was raised by selling 2,020 bonds at that time.

Samarasinghe said primary dealers could make large profits when the tenure was long. A steeper yield curve would also help them make more profits. The controversial March 29 auction had taken place hours before a monetary policy decision which led to speculation of a rate hike.

Following the auction and the monetary policy statement, the Central Bank called for investment advisors to sell up to USD 3.0 billion in sovereign bonds, changing sentiments and sending yields plunging down. It was not clear why the statement had not been released before the auction. It was the company owned by the Governor’s son-in-law which obtained highest number of bonds during last year through primary dealing, Samarasinghe said.

He said that highest investment share of the EPF monies amounting to Rs. 1,300 billion had been made on Treasury and government bonds. If the EPF had purchased those bonds directly without a primary dealer’s intervention, it would have been able to earn a profit of around Rs. 80 million. Samarasinghe called it a huge robbery of savings of the workers of this country, Samarasinghe said.

"Neither the Finance Minister nor the Prime Minister nor the President has uttered a word against this scam. This money belongs to workers and they are the ones who will suffer," Samarasinghe said.

JVP trade Union Wing Leader KD Lalkantha and Propaganda Secretary Vijitha Herath also addressed the media.


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