Mahendran admits PM ordered auction method

Bond scams probe.

Former Governor of the Central Bank Arjuna Mahendran, testifying before the Presidential Commission of Inquiry probing the bond scams, yesterday, said it was Prime Minister Ranil Wickremesinghe who had instructed him to issue Treasury bonds only through public auctions.

Mehendran was answering a query raised by Commission member Justice Prasanna S. Jayawardena. He said Prime Minister Wickremesinghe had instructed him to stop direct placement and he (Mahendran) had, on Feb. 27, 2015, instructed the Public Debt Department to do so.

Answering questions from the Commission members, Mahendran said the Prime Minister had directed him to stop direct placement following a Cabinet subcommittee meeting on Economic Affairs on Feb. 24, 2015.

Questioned by Senior Additional Solicitor General Dappula de Livera, Mahendran said he had advised the Director of the Public Debt Department of the Central Bank on February 27, 2015 to stop direct placement.

He said the Monetary Board of the Central bank had been informed of his decision on March 6, 2015.

At this juncture the Senior Additional Solicitor General Livera told Mahendran that the Monetary Board of the Central Bank had never taken a decision to stop direct.

In reply, Mahendran said he didn’t agree with what Livera said.