“‘No area of contention regarding bond sales” – Finance Minister

(COLOMBO, LANKAPUVATH) – Finance Minister Ravi Karunanayake on Thursday (16) dismissed allegations of possible irregularities in Government bond sales that are now under investigation.

“I give 100 percent guarantee there won’ be any area of dispute there. It is only anarchists who are trying to fish in troubled waters,” Minister Karunanayake told CNBC’s “Street Signs.

His comments come as a commission probes possible irregularities in Government bond sales. The commission recorded a statement from Former Central Bank Governor Arjuna Mahendran, who oversaw a controversial sale.

Minister Karunanayake said the issue was an “inherited” problem and that the Government will rectify any possible issues.

“There is no area of contention,” he added.

President Maithripala Sirisena appointed the commission to investigate the sale after opposition lawmakers demanded an independent inquiry. They charge that the sale has cost the state more than $1 billion in rising borrowing costs over the past two years. The central bank rejects those claims.

The February 2015 bond auction was originally intended to sell 1 billion rupees ($6.6 million) of 30-year bonds. It eventually grew to more than 10 times that amount, to meet government borrowing needs.

More than half of the issue was sold to Perpetual Treasuries, a subsidiary of a company owned by Mahendran’s son-in-law, in what has been criticized as a conflict of interest.

Despite the troubles, government bond sales are reportedly now on track.

On Tuesday, the Sri Lankan central bank said after market hours that it had on behalf of the government raised a record $973.25 million through a Sri Lanka Development Bond auction.

 

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