Treasury Bonds Probe Mahendran’s evidence examination ends

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By 2017-10-13

The examination of former Central Bank Governor Arjuna Mahendran's evidence was finalized yesterday, after seven days of cross examination.

Former Governor Mahendran's evidence was re-examined by his counsel Romesh de Silva, PC yesterday and maintained to challenge several accusations and suggestions made against Mahendran during his cross examination.

During the re-examination of evidence Mahendran was questioned regarding the breakfast meeting of 26 February 2015, where a Rs 15 billion fund requirement for road......development projects, was noted. He was also inquired as to the procedure that was followed at the 27 February Treasury Bonds auction.

Mahendran, responding to this, claimed that correct procedures were followed where Rs 10 billion was accepted by the Public Debt Department, despite his suggestion to keep Rs 20 billion which had been collected through bids. He noted that the accepted sum had not been challenged by the CBSL Tender board and the monetary board.

On the matter of the conflict of interest between Mahendran and his son-in-law Arjun Aloysius of Perpetual Treasuries Ltd., Mahendran maintained absolute innocence.

Here, Mahendran's counsel claimed that the group from the Attorney General's Department, which provide legal advice to the CBSL, could have pointed out this conflict of interest between the CBSL Governor and a primary dealer who happens to be his son-in-law.

This was met with mocking laughter by the representatives of the AG's Department.

Mahendran continued to maintain that he did nothing wrong and that he did not give information to Arjun Aloysius or the PTL.
He claimed that he had ensured the correct procedure during the Treasury Bonds auction and added that the removal of the five percent penal rate had been according the due process. As his counsel highlighted, Mahendran had "worked tor the best of his ability for the best of the CSBL and the country."

Following this, Commissioner, Supreme Court Judge Prasanna Jayawardene put several questions to Mahendran regarding the accounting standards maintained by the CBSL and a number of transfers he had signed during his tenure.

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