3 state banks' chair­men pull the trig­ger on Ravi K

Sunday Times (Sri Lanka) - - NEWS - By Manopriya Gu­nasekara and Ran­jan Katugam­pola

For­mer Fi­nance Min­is­ter Ravi Karunanayake in­structed three State Banks to bid at lower rates dur­ing two Trea­sury Bond (TB) auc­tions held last year, the Chair­men and se­nior of­fi­cials of the State Banks told the Com­mis­sion of In­quiry (CoI) prob­ing the TB is­sue this week.

Those who tes­ti­fied be­fore the CoI last Wed­nes­day in­cluded Peo­ple’s Bank Chair­man He­masiri Fer­nando, Bank of Cey­lon Chair­man Roland Per­era and Na­tional Sav­ings Bank Chair­man Aswin De Silva.

Their ev­i­dence was led by Ad­di­tional So­lic­i­tor Gen­eral Priyan­tha Nawana, Se­nior State Coun­sels Shahida Bar­rie and Dr Avanti Per­era.

Tes­ti­fy­ing be­fore the CoI on Wed­nes­day (4), the three Chair­men of the State Banks said that, at two meet­ings held for se­nior of­fi­cials of State Banks at the Fi­nance Min­istry on Mar.28 and 30 in 2016, for­mer Fi­nance Min­is­ter Karunanayake in­structed them to bid at lower yield rates at two TB auc­tions held at the CBSL on Mar.29 and 31, 2016. Mr Karunanayake even gave them a range of yield rates at which they should bid. The rates which the for­mer min­is­ter in­structed them to bid were lower than the rates which pre­vailed in the mar­ket at the time, but Mr Karunanayake had as­sured them at both meet­ings that rates which were higher would not be ac­cepted. Th­ese prom­ises were not kept when the auc­tions took place. This re­sulted in the Banks los­ing out on the op­por­tu­nity to make sub­stan­tial profits and con­se­quently, suf­fered heavy losses, they stressed.

Peo­ple’s Bank Gen­eral Man­ager Was­an­tha Ku­mar mean­while, tes­ti­fied that Se­nior Ad­viser to the Prime Min­is­ter, S. Paskar­alingam, was also present at the meet­ing held on Mar.28. Mr Ku­mar had sent him an email about the CBSL ac­cept­ing bids at higher rates, con­trary to as­sur­ances given by Mr Karunanayake. Mr Paskar­alingam, how­ever, did not re­ply, he added.

The Bank lost an op­por­tu­nity to make a large profit by bid­ding at lower rates ac­cord­ing to the for­mer Fi­nance Min­is­ters in­struc­tions, which in ef­fect was a colos­sal loss to the Bank, Mr Ku­mar tes­ti­fied.

The CoI is prob­ing the is­sue of CBSL TBs from Fe­bru­ary 1, 2015 to March 31, 2016 and com­prises Supreme Court Jus­tices K.T. Chi­trasiri (Chair­man), Prasanna Jayawar­dena and re­tired Deputy Au­di­tor Gen­eral V. Kan­dasamy.

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