Lankan central bank chief to go on leave over bond scandal: PM

Sri Lankan Prime Minister Ranil Wickremesinghe today said the country's central bank governor has been asked to go on leave until a probe is completed into the alleged USD 76 million bond issue scandal which unduly benefited his son-in-law.
Making a special statement in the Parliament, Wickremesinghe said Arjuna Mahendran, who was handpicked by him to head the central bank after President Maithripala Sirisena's victory in the January presidential election, has been asked to go on leave, until an investigation into the Treasury Bond issue is completed.
Mahendran, a Singapore national of Sri Lankan origin, was accused of directing the bank to sell 10 billion rupees of bonds on February 27 at the rate of 12.5 per cent, after earlier informing the market that one billion worth bonds would be sold at 9.5 per cent.

Half of the bonds issued were allegedly bought by Mahendran's son-in-law.
The allegations could damage the reputation of Sirisena, who had accused his predecessor Mahinda Rajapaksa of enriching his family members during his decade-long rule as president.
The opposition and the local media have alleged the bonds were issued at an above-market interest rate and allegedly benefited Mahendran's son-in-law's company.

They claim the company had inside information about the rate and volume of bonds the bank planned to issue.
President Sirisena appointed a three-member probe panel but the opposition alleged that they were Wickremesinghe's partymen.
Wickremesinghe told parliament that there was no wrong done in issuing the bonds and he was ready to let a parliamentary select committee probe it.

Opposition leader Nimal Siripala de Silva said he was not happy with Wickremesinghe's statement and demanded a debate on the issue.