Rajiva Wijesinha Slams CB Governor For Sanctimonious, Fraudulent Performance On ITN "Naduwa"

UPFA MP Professor Rajiva Wijesinha slammed the Governor of Central Bank Arjuna Mahendran for a 'sanctimonious and fraudulent performance' at the "Naduwa" program on ITN last night.
 
Wijesinha said that the Governor had omitted to mention some facts and was not convincing in his explanations. "He claimed that he had asked his son in law to resign from the company, which had duly happened, but he omitted to mention that the young man had continued on the holding company" Wijesinha stated on his Facebook page.
 
"The Governor's sudden decision to take a large amount on auction raised rates contrary to the directions of the Monetary Board that rates should be kept at the prevailing rates," Wijesinha said. He argued that there was nothing to substantiate Mahendran's claim that it was his own decision "that just happened to benefit one company, and one company alone."
 
Prof. Wijesinha's statement is given below:
 
Sanctimonious and fraudulent performance yesterday by Central Bank Governor with regard to the Bond issue in which a company owned by his son in law's family made a killing. He claimed that he had asked his son in law to resign from the company, which had duly happened, but he omitted to mention that the young man had continued on the holding company.
 
The questioner obviously had been primed to help him denigrate the previous regime at the Bank, and his expressions of surprise were not entirely convincing. He must have known that the statement that there were no arrangements to issue a sovereign bond to repay the maturing bond of $ 500 million could not have been true. There were plans to issue a $ 1 billion bond in the first quarter of the year which the new government did not do. Maybe it was against foreign bonds, but that does not mean the previous regime had no plans in place.
 
Indeed the current regime did issue a foreign bond, which it said it was happy with, only for Eran Wickremaratne to claim that the reason it did not do well was because the former Governor had sabotaged it. That would have been appalling behaviour on the part of the former Governor, but it does not seem likely that he made telephone calls to convince the world not to purchase the current government's bond. That srt of practice is associated with Ranil Wickremesinghe who threatened the Hongkong and Shanghai Bank many years ago about taking up a government bond, and claimed that when he came into office it would not be honoured.
 
Meanwhile the attacks on what are erroneously termed private placements continue. The practice of direct placement began in the nineties, and is the best way to ensure interest rates are kept down, since the price is fixed after an auction where the lower bids are taken up. The Governor's sudden decision to take a large amount on auction raised rates contrary to the directions of the Monetary Board that rates should be kept at the prevailing rates.
 
The Governor may well have acted on UNP policy to raise rates to help the market, ie investors who want to make money, but that policy does not benefit the Sri Lankan people. And there is nothing to substantiate his claim that it was not his own decision, taken at a crucial moment that just happened to benefit one company, and one company alone.
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