LNP – Singapore declines to extradite Arjuna Mahendran implicated in bond scam

The Singaporean authorities have cited inability to extradite former Central Bank Governor Arjun Mahendran to Sri Lanka in terms of the legal system of that country, posing a fresh challenge for the government in its attempt to investigate the bond scam which caused a loss of Rs.10 billion in 2015,

The Sri Lankan Attorney Generals Department sought the extradition of Mr. Mahendran who is implicated in the bond fraud that took place under the Yahapalana government. Mr. Mahendran, a Singaporean of Sri Lankan origin, was appointed Central Bank Governor at that time.

Last year, the Colombo Magistrate’s Court noticed him to appear before the court on February 25, 2025 over a case filed by the Bribery Commission.

The Colombo Permanent Trial-at-Bar bench has already issued a warrant through Interpol for the arrest of former Central Bank Governor Arjuna Mahendran in connection with the Central Bank bond scam

The case has been filed over the alleged misappropriation of bonds causing a loss of over Rs. 10 billion to the government of Sri Lanka in 2015.

President Anura Kumara Dissanayake, in the run up to the presidential elections last year, vowed to bring him back to Sri Lanka. He even said it would be a priority of his government. After the presidential election, then Cabinet spokesman Foreign Affairs Minister Vijitha Herath announced that the Public Security Ministry had commenced legal investigations into the bond fraud, taking into account the findings of the Presidential Commission of Inquiry and the Parliamentary Select Committee.

The Central Bank bond scam, which occurred on February 27, 2015. The scam involved the issuance of government bonds by the Central Bank under the leadership of Mr. Mahendran as the governor.

Perpetual Treasuries Limited, a primary dealer in the bond market and owned by Mahendran’s son-in-law Arjun Aloysius, was a major beneficiary of the bond issuance.

A top source said that the legal authorities of Singapore had informed their Sri Lankan counterpart that Mr. Mahendran could not be extradited according to the law of that country.

The Commonwealth Schemes provide for extradition of fugitive criminals between Sri Lanka and Singapore as commonwealth countries.