Presidential Commission on Treasury Bond issue: Tender Board was compelled to comply with former Governor’s decision on accepting rS. 10.5 b in bids | Daily News


Presidential Commission on Treasury Bond issue: Tender Board was compelled to comply with former Governor’s decision on accepting rS. 10.5 b in bids

 The Tender Board was compelled to comply with former Governor Arjun Mahendran’s decision on accepting bids worth Rs.10.5 billion on the questioned Treasury bond auction that took place on February 27,2015,former Superintendent of Debt Department D.N.K. Seneviratne said.

Asked whether the decision to change from direct placement method to auction method came as a directive, former SPD Seneviratne said in fact it came as an instruction that which the PDD and the Tender Board had to accommodate.

She said even though the instruction came in verbal form, the PDD and the Tender Board, despite their disagreement, had to comply with former Governor’s instruction.

She also said the written instruction on changing into auction method came via the Monetary Board on March 6, 2015.

Former SPD Seneviratne also said that she was transferred to the Public Debt Department only on February 9, 2015 and that it was her first Treasury bond auction as the head of the PDD.

She went on to explain that she has been working as the Deputy Director and the Additional Superintendent of the Employment Provident Fund from 2007 and as the Superintendent of the CBSL Currency Department from 2014 until her sudden transfer.

Seneviratne mentioned that she has no experience whatsoever regarding the operations of the Public Debt Department and on the questioned auction date she was solely guided by the Assistant Superintendents of Debt, Head of the Front Office and other officers of the Public Debt Department.

Explaining the background to the questioned auction, Seneviratne said the then Deputy Governor Ananda Silva conveyed to her that the Monetary Board has held a meeting on February 23, 2015 and had requested the SPD to conduct a Treasury Bond issuance for the maturity period of 30 years.

“The officers including the ASPD and the Head of the Front Office recommended to me to place the said Treasury bonds using the direct placement method,”Seneviratne said.

Asked whether they held a DDMC meeting prior to the questioned auction, Seneviratne said did not,since the Head of the Tender Board Operational Department’s was not present.

Seneviratne further said when the former Governor walked in to the PDD as the questioned Treasury bond auction was taking place, he specifically asked for the auction details.

“The former Governor on his second visit asked for the auction details again and went through the bid sheet as well,” Seneviratne further said.

Asked if the former Governor was able to then go through as to which primary dealers had bid at the auction, Seneviratne answered that it should have been the case.

The former SPD was testifying before the Presidential Commission to Investigate and Inquire into the Issuance of Treasury Bonds and the evidence was lead by Senior Deputy Solicitor General Priyantha Navana.

The witness was questioned on corresponding Tender Board minutes, bids received on the transactions at the questioned auction and the option sheets and other relevant documents.

The Tender Board decision making process with regards to the issuance of Treasury bonds, in the questioned time period and beyond, was also scrutinized by the Commission.

The Commission also questioned Seneviratne on the unusual behavior of patterns of Primary Dealers on the date where the questioned auction was held.

It was noted by the Commission that Perpetual Treasuries Limited has bid for themselves and through the Bank of Ceylon as well, which is an unusual practice. It was also noted that the market share of the questioned auction was 50% as well done by the Perpetual Treasuries Limited. The Commission also noted that if the first decision of the PDD to accept only 2.6

million bids at the questioned auction,Perpetual Treasuries Limited’s bids would not have become successful.

Seneviratne also said when she took the second auction sheet to the Tender Board, all the tender board members were shocked by the former Governor’s decision.

“They said they cannot accept this decision until the former Governor made clarifications on the decision. They also asked as to why the former Governor had spoken to you and came into the PDD when an auction was taking place.”

“The then Assistant Governor Sepala Ratnayake mentioned this decision would cost the government much. Everybody wanted to go and meet the former Governor, but, in the end, Tender Board Chairman Samarasiri took a call on his mobile phone and inquired from Mahendran on the matter,” Seneviratne explained.

Meanwhile, Attorney at Law Harsha Fernando representing the Tender Board Chairman, questioned former SPD Seneviratne as to who prepared the yield rates when the direct placement auction method is used and she answered that the officers of the Front Office, overseen by the ASPD prepared the auction sheet and that the prepared price approval sheet is signed by a

Deputy Governor.

The Commission also noted that former SPD Seneviratne was transferred as the Director of the Information Department, which did not comply with her expertise from September 2015.

The current SPD T.H.B. Saratchandra is to testify before the Commission today (07).



Visit Sri Lanka's Largest online shop. Over 125,000 unique categories such as Fresh Flowers, Cakes, Food, Jewllery, Childrens Toys and other Sri Lankan e-commerce categories. Low delivery cost to most cities here and free delivery in Colombo.

Add new comment