A Sri Lankan court issued a warrant to former Central Bank of Sri Lanka Governor Arjuna Mahendran in relation to the central bank's bond issuances between 2015 and 2016, Colombo Page reported March 15.
The court issued Mahendran a warrant after he failed to appear before the country's Criminal Investigations Department, or CID, for the second time to give a statement. Mahendran, who is currently out of the country, has been notified of the warrant through courier service, email and text message, a CID officer noted.
In March 2015, the central bank faced insider trading allegations in relation to a bond auction in February 2015 under which the central bank raised 10 billion rupees although the offering was initially meant to raise 1 billion rupees.
In April 2015, Mahendran was cleared of allegations that a family member benefited unduly from the central bank's sale of 30-year treasury bonds. Mahendran stepped down from his role in June 2016, with Indrajit Coomaraswamy named as his replacement.
A presidential commission of inquiry was set up in 2017 to probe the central bank's bond issuances during Mahendran's tenure in 2015 and 2016.
In January, the government panel recommended taking action after determining that the former central bank head engaged in insider trading and caused losses to the state treasury.
In its report, the panel determined that Mahendran leaked sensitive information to his son-in-law Arjun Aloysius, a bond trader, when he was serving as the central bank's governor. The panel also found that Mahendran's intervention in the bond sale in February 2015 caused an avoidable loss of 688,762,100 rupees to the state treasury.
As of March 15, US$1 was equivalent to 156.05 Sri Lankan rupees.
