Perpetual Treasuries gained while EPF lost - DSG Gunatillake

Central Bank bond scam probe

By Sarath Dharmasena and Shy am Nuwan Ganewatte

Deputy Solicitor General Milinda Gunatillake, refering to the submissions made by Additional Director of Information Technology Department of the Central Bank, yesterday, told the Presidential Commission probing the alleged bond scams that Perpetual Treasuries along with a few other Primary dealers had, through treasury bond transactions in the secondary market made high profits by selling bonds to the Employees’ Provident Fund (EPF).

The total net cash inflows of Perpetual Treasuries in its bond transactions with state institutions were in excess of Rs 6.6 billion and the lion’s share of them had come from the sale of Rs. 5.8 billion worth bonds to the EPF, said Gunatillake.

Gunatillake told the Commission that Perpetual Treasuries had sold bonds to Sri Lanka Insurance Corporation, the University Grants Commission EPF, National Savings Bank to the tune of Rs. 759 mn, Rs. 62 mn and Rs. 14 mn respectively.

In answer to a question from Additional Solicitor General Milinda Gunatillaake, Alwis said that Perpetual Treasuries had made high profits, but the EPF had incurred heavy losses.

At this point, the President’s Counsel for Perpetual Treasuries, Nihal Fernando, said it was wrong to call his client’s earnings profit. Gunatillake said he would call it net cash inflow.

Alwis gave evidence after submitting an affidavits to the Commission as regards the details of the treasury bond transactions

Summing up Alwis’ submissions, Gunatillake told the Commission that the treasury bond dealings had been planned in such a way that the company which gained the most couldn’t be identified. "There was a pattern of trading designed to mask the real beneficiary."

Gunatillake said: "Through this pattern of trading the lion’s share of profits went to Perpetual Treasuries while the lion’s share of the entire loss went to the EPF. Small net sash inflows went to Pan Asia B and DFCC."

His statement was endorsed by Alwis.

Having said so, Gunatillake smilingly asked the President’s Counsel appearing for Perpetual Treasuries, "Are you happy Mr. Fernando?"

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