Sri Lanka PM plans to investigate bond sales during previous regime

Dec 01, Colombo: Sri Lanka's Prime Minister Ranil Wickremesinghe yesterday informed Parliament that the Government plans to investigate bond issuances before 2014 during the previous government of Mahinda Rajapaksa after the Bond Commission concludes its proceedings.

Making a statement in Parliament the Prime Minister said that there was no transparency in the bond issuances during the Rajapaksa regime and the bonds had been issued from 2008 to 2014 as private direct issue similar to a “pyramid scheme”.

He said the government will commence a probe into the bond issues that had taken place from 2008 to 2014, and also the borrowings made without obtaining Parliamentary approval, and allegations of insider trading at the stock exchange during the previous regime.

Tabling a report obtained from the Central Bank on Treasury Bonds issuances from 2008-2014, the Premier told parliament that the previous government had issued bonds totaling Rs. 5,147 billion during that period and out of that, Rs 4,702 billion had been direct private placements without informing the Monetary Board or the Central Bank and Parliament.

He said 90 percent of those bond issues had been done on private placements, while issues have also been done through using EPF, ETF and National Savings Bank as captive sources. “These are more or less similar to pyramid schemes,” he said.

He said bonds had been issued under direct placements only in four instances under the present regime for the value of Rs. 157.5 billion, while there have been 84 instances of issuing bonds during the tenure of the last regime.

The Prime Minister said that they will get the Finance Committee in Parliament to probe these bond issues, which have been done according to whims and fancies of “certain persons”.

He said probes would be conducted on the frauds that had taken place in the stock market between 2008 and 2014.

Speaking of his presence at the Presidential Commission of Inquiry on the controversial Central Bank bond issuance, the Premier said the transparency brought about by the Unity Government would help establish a new political culture in Sri Lanka.

The Prime Minister, assuring his Government's commitment to strengthen Parliament's control over public finance said the transparent mechanisms put in place by the government have paved the way for credible investigations.

“Unlike the Rajapaksa regime, we are not ready to cover up wrong doing, trample the supremacy of the law and bury social justice. On January 8 we took over a country trapped in a debt crisis, where there was no law. Fraud and corruption were rampant and the country was engulfed in terror. Our Government, led by the President, is on track to change this plight. That road is difficult and full of traps. I pledge to continue this mission to create a civilized Government, just society and a democratic Sri Lanka,” he said.