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Bond issue: CBSL Assistant Director makes bombshell disclosures
Investigators assisting the Commission of Inquiry (COI) probing the issue of Central Bank treasury bonds are due to present their findings tomorrow (17) on the dealings of the CBSL’s Assistant director B.H.I. Saman Kumara, who once handled the dealings of the Employees’ Provident Fund (EPF).
Mr Kumara’s wealth, questionable financial transactions and his close relationship with former Central Bank Governor Arjuna Mahendran came in for close scrutiny by the Commission on Wednesday (12) when Mr. Kumara gave evidence. Additional Solicitor General Dappula de Livera, who led the evidence, subsequently asked the Commission to give time for investigators to conduct a probe and submit their findings by tomorrow.
The commission is looking into the sale of treasury bonds from February 1, 2015 to March 31, 2016.
The Commission comprises Supreme Court Justices K.T. Chitrasiri, Prasanna Jayawardena and retired Deputy Auditor General V. Kandasamy.
At the initial stage of giving evidence on Wednesday, Justice Prasanna Jayawardena warned Mr. Kumara that giving false evidence to the Commission while under oath would be a serious offence under the Penal Code. He told Mr. Kumara that if such an offence was committed, he could be sentenced to prison.
In his evidence, Mr Kumara admitted that among the assets owned by him and his close relatives were several vehicles, a filling station and three businesses including a gem exporting company. He said he and his wife owned a 17 perch land in Panadura and a three storey house in Colombo. He maintained 19 bank accounts at nine different banks and had fixed deposits amounting to more than Rs. 8 million. He also stated that he was engaged in buying and selling vehicles.
Mr. Kumara said he was recruited to the Central Bank’s EPF division on a contract basis in 2011 and that he also invested in the stock market and knew many primary dealers.
Under questioning, Mr. Kumara admitted that he had not submitted an assets and liabilities declaration for two years. The commission told him this was a serious offence.
He was also questioned on his relationship with former CBSL Governor Arjuna Mahendran and his son-in-law Arjun Aloysius, who owns the controversial Perpetual Treasuries Limited. Mr Kumara said he had spoken with Mr. Aloysius on several occasions during 2011 or 2012 while being involved in investment transactions.
Justice Chitrasiri instructed Mr. Kumara to surrender his mobile phone which he claimed was broken.
At this point, Mr. Kumara requested that he be given permission to make a statement. The request was granted whereupon Mr. Kumara, his voice choking with emotion, claimed he was the victim of a “conspiracy” at the Central Bank. He said he tried to develop financial markets but senior officials kept transferring him. He added he had been enthusiastic about working for former Governor Mahendran.
He acknowledged his close relationship with the former CBSL Governor, revealing that after the treasury bond auction on February 27, 2015, Mr Mahendran had personally asked him to visit a Government Minister to provide details.