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CB Bonds: JVP asks Governor to step down
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The Janatha Vimukthi Peramuna (JVP) today called for the removal of Central Bank Governor Arjuna Mahendran from his post until the investigation into the controversial bond issue was completed.JVP parliamentarian Sunil Handunneththi said the Governor should be removed or he should resign from his post to pave the way for a proper investigation into the one-billion-rupee bond issue, which the JVP describes as a shady deal.
Mr. Handunneththi said the bond issue appeared questionable or controversial for several reasons. He said the bonds were to be issued at a market rate of 9.5 per cent to raise Rs.1 billion but it was ultimately issued at 12.5 per cent raising Rs.10 billion.
Mr. Handunneththi said bonds are usually awarded to several parties in blocks so as to make the interest rates competitive but in this case bonds worth Rs.5 billion had been issued to a company owned by the governor’s son-in-law at an average of 12.3 per cent resulting in Rs.2 billion loss for the Government.(YP & DS)
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