EPF Dealer ‘Charlie’ on PTL payroll since 2014 got Rs. 97mn

PTL Chief Dealer Nuwan Salgado revealed before the PCoI yesterday that it had paid several informants since July 2014 including the T-Bond dealer of EPF codenamed “Charlie” who had received Rs. 97 million (up to March 2015).

PTL Chief Dealer Nuwan Salgado said that he had maintained a document, which contained payments allocated by PTL to ‘informants’ coded as ‘Charlie’, ‘Tango’ and ‘Car’ channeled through its related group companies on the instructions of PTL CEO Kasun Palisena.

After the conclusion of the evidence of former Governor Arjuna Mahendran, the Commission called Chief Dealer of PTL, Nuwan Salgado before the Commission to question him on a document which he is said to have maintained in his computer on the instructions of PTL CEO Kasun Palisena.

It was revealed that Chief Dealer of PTL, Nuwan Salgado had maintained a document in his computer relating to the payment allocations made by PTL channeled through its other related companies (Perpetual Asset Management, W.M. Mendis & Company and Perpetual Capital) to ‘informants’ referred by three code names.

‘Charlie’, ‘Tango’ and ‘Car’ had been used as code names by Nuwan Salgado in his document.

This Document reflected several fund transactions made by PTL since July 17, 2014 to March 10, 2015.

This document had been submitted by the Attorney General’s Department to the Commission by way of an affidavit of the witness, which was sworn on October 3, 2017.

Deputy Solicitor General Milinda Gunatilleke questioned the witness.

DSG Milinda Gunatilleke: What did this document record?

Witness Salgado: It reflects payments made by PTL time to time to its related companies

DSG: What are the companies in the group that are mentioned in the document?

Witness Salgado: Perpetual Asset Management, W.M. Mendis & Company and Perpetual Capital

DSG: For what were these payments made by PTL to its group companies?

W: When I was asked to maintain such a file, I was asked to update it under three categories, which I mentioned on the right hand side in the document. Whenever I had to update payments from PTL to its group companies, I updated it under these names.

DSG: It was for those individuals, right?

W: That was my understanding

DSG: What were the names you mentioned in the document?

W: Charlie, Car and Tango

DSG: So, there are three names to which payments have been made by PTL through its related group companies bearing those three code names, right?

W: Yes

DSG: How are they described as per this document? There are described as “informant” in this document, right?

Justice Prasanna Jayawardena: Why there is a specific word referred to as ‘informant’?

W: That is something I put to the document when preparing it, which I shouldn’t have done.

Justice Jayawardena: Whose Document is this?

W: This is the document that I maintained and Kasun Palisena wanted me to update, which I did.

Justice Jayawardena: Was Kasun Palisena aware of this document?

W: He was aware of it.

J: Was he aware of this word ‘informant’?

W: I don’t think he was aware but I had e-mailed this document to him, so he might have seen that.

J: So, therefore, he could have seen that this word ‘informant’ had been used in the document, right?

W: Yes

DSG Milinda Gunatilleke: Now, in the dealing room, you and other dealers including Kasun Palisena had referred to an individual called as ‘Charlie’, right?

W: Yes

DSG: Who was that?

W: For the dealing purposes, we named the primary contact person of the EPF in dealing as ‘Charlie’. Time to time the individuals from the EPF may have changed but that code name remained the same.

DSG: So, up to September 2015 it was Mr. Udayaseelan and thereafter it was Mr. Saman Kumara, right?

W: Yes

DSG: Why were these code names used?

W: Code names were used in the dealing room for the purpose of anonymity, because brokers and other counter parties may be in the lines.

DSG: So, could these individuals referred in code names, had provided inside information in relation to bond trading?

W: I don’t know exactly the payments were made. But in the way this document was asked to be maintained and what I understood from the discussions I had with Kasun Palisena, they were tracking certain information. I thought these were considerations for giving inside information about treasury bonds.

DSG: Can you identify the individuals referred to as ‘Tango’ and ‘Car’ in this document?

W: No

DSG: Were they similar individuals to whom you referred to as ‘Charlie’?

W: In my view, yes.

DSG: You had also used the name ‘Little Johnny’ from time to time when dealing, right?

W: Yes. Mostly it refers to ‘ETF’ (Employee’s Trust Fund) but we also used that name ‘Little Johnny’ to call Kaveen Karunamurthi as well.

DSG: Mr. Karunamurthi was the dealer at DFCC when the switches were done between PTL and NSB, right?

W: Yes

DSG: There is a code name used as ‘Wolverine’, right?

W: Yes

DSG: Who was that?

W: We used it to refer the primary contact person of the NSB. And at that time it was ‘Naveen Anuradha’

DSG: Have you updated this document further?

W: Yes, there should be a further updated document

This Document only reflected several payments made by PTL since July 17, 2014 to March 10, 2015.

DSG: Where would that be?

W: In my Computer

DSG: Now this document reflects a series of payments, right?

W: Yes

DSG: The last payment of this document is referring to ‘Charlie’, right?

W: Yes

DSG: That payment happened on March 10, 2015, right? (After the controversial bond auction which took place on February 27, 2015)

W: Yes, basically I updated this document.

DSG: On instructions of whom?

W: Kasun Palisena.

DSG: So, you said that after this date you have updated this document and that document would have the rest of the details, right?

W: Yes

DSG: What was the amount paid?

W: Rs. 3 million

At this moment DSG Gunatilleke played new voice recording, where Nuwan Salgado and Kasuna Palisena’s voices are evident as a background discussion.

DSG: What was Kasun Palisena telling you?

W: He was telling me to offer ‘Charlie’ the 30.

Then the DSG continued to play that voice recording in which Nuwan Salgado was speaking to EPF dealer Udayaseelan regarding a deal which was settled in the Lanka Settle System in June 2015.

DSG: Now up to September, the person PTL referred to as Charlie was ‘Udayaseelan’, right?

W: Yes

DSG: Then after the month of September, if PTL was referring to an individual at EPF as ‘Charlie’ who could that be?

W: It is Saman Kumara

Thereafter Justice Prasanna Jayawardena questioned the witness with regard to this document maintained by him.

Justice Prasanna Jayawardena: Now, you maintained this document on whose behalf?

W: On Kasun Palisena’s behalf

Justice Jayawardena: That means on behalf of PTL, right?

W: That I do not know exactly. Kasun would know why he asked me to maintain such a document.

Justice Jayawardena: This is the document maintained on the instructions of the CEO of PTL, right?

W: Yes

Justice Jayawardena: How exactly were these payments realized. It says payer is PTL and payee is Perpetual Asset Management or W.M. Mendis & Company or Perpetual Capital? What was the mechanism used?

W: These were outflows of the investments these related group companies held with PTL.

J: So, does that mean that PTL used money they invested under Perpetual Asset Management or W.M. Mendis & Company or Perpetual Capital?

W: No. The related companies invest with PTL,

J: PTL use part of that money to these payments?

W: Not that we –PTL — use part of it. This is them requesting us to send money from the investment of those related companies themselves.

J: So, how do you know that the money went to the informant?

W: That I don’t know; whether these payments exactly went to that person. I was asked to update those payments under three categories, which I did.

J: So, according to this document, there were payments to a person named as ‘Charlie’, right?

W: Yes

J: This is fairly a large amount of money over a period of time, right?

W: Yes

J: Considering the payments made to ‘Charlie; reflected as per this document, do you think that all of that money was paid to him?

W: I assume so.

J: When did you join PTL?

W: From the inception.

J: These details show, that from July 17, 2014, very shortly after PTL started operating as a Primary Dealer, PTL have been paying an informant named as ‘Charlie’ a sum of money Rs. 97 million (During July 17, 2014 –March 10, 2015). Was that correct?

W: Yes

J: According to the name ‘Charlie’ it was EPF’s Udayaseelan, right?

W: Yes

J: Was PTL actively dealing with EPF at that time?

W: Yes

J: If Charlie is Udayaseelan then PTL was obtaining inside information from ‘Charlie’ from the entirety of 2014, was that correct?

W: If the person referred to as Charlie had not been changed by EPF in 2014 that is correct.

J: Now, between July 17, 2014 and December 30, 2014, there are 18 payments amounting to Rs. 94 million made to Charlie, right?

W: Yes

J: And that period is outside of our mandated area, which was the time that Mr. Nivard Cabral was the Governor of CBSL, right?

W: Yes

J: We are interested in the payments that are within our mandated time period starting from February, 2015 to 2016. So, did this pattern continue?

W: Yes

J: Now, PTL allocating payments to their informants continued in 2015 and thereafter as well, is that what you are saying?

W: Assuming yes

J: Do you know who were ‘Tango’ and ‘Car’?

W: No

J: Would they be state institutions?

W: That I don’t know

J: ‘Tango’ and ‘Car’ were also receiving payments from 2014, right?

W: Yes

J: So, then basically, from the start of PTL in 2014, they were paying informants and it was a large amount of money.

Witness was silent

Justice Prasanna Jayawardena: Now, between July 17, 2014 and December 30, 2014, there are 18 payments amounting to Rs. 94 million made to Charlie, right? Witness Nuwan Salgado: Yes Justice Prasanna Jayawardena: And that period is outside of our mandated area, which was the time that Mr. Nivard Cabral was the Governor of CBSL, right? Witness Nuwan Salgado: Yes Justice Jayawardena: We are interested in the payments that are within our mandated time period starting from February, 2015 to 2016. So, did this pattern continue? Witness Salgado: Yes Justice Jayawardena: Now, PTL allocating payments to their informants continued in 2015 and thereafter as well, is that what you are saying? Witness Salgado: Assuming yes