Central bank Bond Scam travel ban on Ravi, Mahendran, Aloysius

By Yoshitha Perera 

Court decision on issuing arrest warrants on former Finance Minister Ravi Karunanayake, Arjuna Mahendran, Arjun Aloysius and nine others will be delivered on March 6 by Colombo Fort Magistrate’s Court.   

The Fort Magistrate also imposed a travel ban on former Minister Ravi Karunanayake, Perpetual Treasuries Ltd (PTL) owner Arjun Aloysius and 10 others in connection with the bond scam.  

When the case was taken up before Colombo Fort Magistrate Ranga Dissanayake, Senior Deputy Solicitor General (SDSG) Haripriya Jayasundara has requested the Magistrate to issue an arrest warrant on the twelve suspects who have violated the law during two Treasury bond auctions conducted on March 29 and March 31, 2016.   Citing misappropriation, SDSG Jayasundara said that treasury bonds had been issued with a face value of Rs. 36.98 billion on March 29, 2016. During the submission he informed the Court that the Attorney General stated that these suspects could face charges of insider dealing and market manipulation under Section 386 and 398 of the Penal Code read with 5 (1) and 5 (2) of the Public Property Act. She also informed Court that the charges can be filed under the Registered Stock and Securities Ordinance read with the CBSL’s Code of Conduct for primary dealers.   
However, Magistrate questioned the SDSG and the CID, if the charges come under the Public Property Act, why the Police could not apprehend the suspects without obtaining an arrest warrant from the Magistrate.   

Responding to the question, SDSG Jayasundara said that since the case was sensitive, the CID and the AG’s Department had decided to inform the Magistrate on obtaining an arrest warrant. Explaining the matter, SDSG Jayasundara said that the culprits behind the particular matter had created an artificial market in 2016 and due to this violation there had been a public nuisance within the country.   

“When Ravi Karunanayake was serving as the Finance Minister, he had a meeting with three leading state bank officials and at this meeting Mr. Karunanayake had told the bank officials to maintain a certain limit when issuing treasury bonds. Accordingly, the banks had to decrease the limit of issuing treasury bonds when conducting auctions and this had caused a huge market slump within this period,” she informed the Magistrate.   

She said that due to this limit maintained by the State Banks during that time, PTL had obtained many illegal bonds violating the law and this matter had affected the Employees Trust Fund (ETF) in the country.   However, Magistrate said that the Magistrate Court could not maintain a case under violation of Public Property Act above Rs. 500 and therefore, evidence of the particular case be taken as affidavits.   The Magistrate also said that without taking evidence which are related to the matter, he could not issue an arrest warrant on the suspects.