Arjuna Mahendran arrives before PCoI - UPDATED
2017-Sep-19 | By News Admin

Former Governor of the Central Bank Arjuna Mahendran testified today before the Treasury Bond Commission with regards to the questioned 27 February 2015 auction as well as the 29, 31 March 2016 auctions, which are under the scrutiny of the Commission.

Mahendran’s position was that he was in fully agreement with the Tender Board decision taken on the 27 February 2015 auction to accept 10.5 billion bids.

He also disagreed with the Auditor General’s position that a loss was incurred by the government at the said auction.

Mahendran also expressed his disagreement with Auditor General’s loss calculation in his special audit report on the Treasury bond issue.

Mahendran also stated that he was not involved in the decision-making processes of 29 and 31 March 2016 auctions, under Commission’s probe.

Legal Representative of former Governor Mahendran, President’s Counsel Romesh de Silva made a submission reserving their right to withdraw from giving evidence at any point that his client was not treated with dignity and fairness.

De Silva PC pointed that Mahendran is not legally inclined to testify before the Commission, as he is not a citizen of Sri Lanka.

Mahendran gave evidence before the Commission on changes he made at the Central Bank when he was appointed as the Governor and also rationalized why he thought public auction was a better method to raise debts more than private placement method.

He also gave evidence on the decision-making process of the 27 February 2015 auction. He also gave reasons for walking into a Market Operations Committee on the same day morning, which was chaired by Deputy Governor Dr. Nandalaal Weerasinghe.

Mahendran said following his appointment, he wanted to address serious issues in the Central Bank, which has caused the CBSL to incur losses up to Rs. 39 billion in 2013-2014 years.

Speaking of the backdrop at which the 27 February 2015 auction was held, Mahendran said the biggest economic issue the newly-appointed government faced in 2015 was the large debts it had to service.

For March 2015, the government requirement was Rs. 72 billion, which was a large sum of money, and drastic actions were necessary to meet the demand, Mahendran said.

Sources : dailynews