The Central Bank’s Information Technology Department’s Additional Director, Wasantha Alwis, has said Perpetual Treasuries had violated the law by failing to pay back, within the day, the money it owed to the Central Bank. The company had obtained the money under the ‘Intra-day Liquidity Facility’ (ILF). Money obtained under this facility must be paid back [...]

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The Central Bank’s Information Technology Department’s Additional Director, Wasantha Alwis, has said Perpetual Treasuries had violated the law by failing to pay back, within the day, the money it owed to the Central Bank.

The company had obtained the money under the ‘Intra-day Liquidity Facility’ (ILF). Money obtained under this facility must be paid back within the same day, he told the Commission of Inquiry (COI) looking into the issue 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.

Mr. Alwis, whose evidence was led by Deputy Solicitor General Milinda Gunathilake, said Perpetual Treasuries had obtained Rs.11.6 billion through the ILF facility on April 1, last year. The money had been obtained to settle payments for bids accepted at bond auctions held on March 29, 30 and 31 last year.

Mr. Alwis presented documents, stating that the company had failed to repay the money within the day, in terms of the law.

President’s Counsel Nihal Fernando, appearing on behalf of Perpetual Treasuries, raised objections at this stage. He said the company had repaid on April 4 the entire Rs. 11.6 billion obtained on April 1. It had also paid the fine imposed for delayed payment. The lawyer said he wanted to question the witness about the matter during cross-examination.

However, the Deputy Solicitor General questioned Mr. Alwis whether a company would be in violation of the law if it failed to repay money obtained through the ILF on the same day. Mr. Alwis said this was the case.

Continuing his testimony later in the week, Mr. Alwis said Perpetual Treasuries had again borrowed from CBSL when settling payments on the earlier loan it had obtained from the CBSL. In addition, Rs. 21 billion had been borrowed from the Employees Provident Fund (EPF), the DFCC Bank and the Pan Asia Bank.

As a result of the Rs. 11.6 billion outstanding in ILF borrowings on April 1, Mr. Alwis said the company had been charged an additional Rs. 88 million on the basis that there was an increase in the market rate from April 1 to 4.

However, the witness told the commission that the Rs. 88 million levied from Perpetual Treasuries was later repaid to the firm by the CBSL. He described this action as unusual and unprecedented.

During cross examination, Perpetual Treasuries’ lawyer Nihal Fernando presented documents that stated the company had repaid all of its loans.

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