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Budget 2022: Budget transfers ‘black’ profits of Perpetual Treasuries to govt. coffers

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ECONOMYNEXT-  Finance Minister Basil Rajapaksa presenting his 2022 budget on Friday (14) transferred 8.5 billion rupees earned by Perpetual Treasuries, alleged to be involved in a 2016 bond scam, to Treasury coffers on the grounds of the company breaching the Central Bank’s best practices code of conduct.

The move came as the cash-strapped government desperately looked for revenue to boost post-pandemic economic revival.

The finance minister said that according to the report of the Presidential Commission of Inquiry into the scam, Perpetual Treasuries Limited has made this profit mainly through “price-sensitive inside information” and “market manipulation”.

“Therefore, this report identifies that Rs. 8.5 billion is (as bee) received by willfully violating the provisions of the code of conduct on best practices issued by the Central Bank of Sri Lanka under the Registered Stock and Securities Ordinance No. 07 of 1937, to the primary dealers,” Rajapksa said in his budget speech.

“According to the recommendations of this Commission, and without hindering the legal actions taken by the Attorney General, it is proposed to transfer to the Treasury the Rupees 8.5 billion that the Perpetual Treasuries Limited has earned in violation of the Code of Conduct of the Central Bank of Sri Lanka.”

Perpetual Treasuries, a Central Bank licensed primary dealer in government bonds’ activities were suspended on several occasions after a bond scam that ran between 2006 to 2016 came to light.

The company was owned by Arjun Aloysius, the son-in-law of ex-Central Bank Governor Arjuna Mahendran who held office in 2015-2016.

A Presidential Commission of Inquiry found that Mahendran had interfered in a bond auction and benefited from leaked inside information to help his Perpetual Treasuries make billions of rupees in profits.

Mahendran raised a policy rate floor outside the regular monetary policy meeting and pressured a tender board to sell bonds at high prices, the inquiry found.

The inquiry also found that Perpetual Treasuries had paid Central Bank dealers who were managing the country’s largest pension fund to buy bonds at high prices and had influeced other state funds.



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Forex crisis will lead to power cuts, warns Ranil

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Udaya pooh-poohs warning

By Saman indrajith

UNP leader and former Prime Minister Ranil Wickremesinghe yesterday told Parliament that the country would face power cuts soon if the government did not resolve the foreign exchange crisis urgently.

Participating in the third reading debate on Budget 2022, the UNP leader said the forex issue could result in Sri Lanka running out of money to import fuel.

Wickremesinghe called on the government to make a statement on the current situation.

The UNP leader pointed out that Sri Lanka had only Rs. 1.5 billion in foreign reserves, out of which Rs. 300 million were gold reserves, which meant only Rs. 1.2 billion was the liquid amount in foreign reserves.

The former PM said the low foreign reserves could lead to the country facing power issues in the future as there would be no funds left for fuel imports. However, the Minister of Power, Udaya Gammanpila, assured that Sri Lanka had enough fuel stocks.

The Minister said it was reasonable for people to assume that there would be power cuts in the future due to the foreign exchange crisis.

Reiterating that Sri Lanka had necessary fuel stocks, Minister Gammanpila said the fuel in hand was sufficient for the next 40 days.

Although the Sapugaskanda Oil refinery had been closed for 50 days, measures would be taken to resume operations at an early date, the Minister added, assuring that the foreign exchange crisis would not result in power cuts.

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State Minister Ranasinghe assures farmers using organic fertiliser compensation in event of losses

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Provincial Councils and Local Government State Minister Roshan Ranasinghe speaking at a meeting held at the auditorium of the Polonnaruwa District Secretariat yesterday

Provincial Councils and Local Government State Minister Roshan Ranasinghe yesterday assured that the government would compensate any paddy farmer who suffered losses due to adopting organic fertiliser.

Speaking at a meeting held at the auditorium of the Polonnaruwa District Secretariat, the Minister said that even if the government had not proposed to allocate funds in the Budget proposals for possible losses to paddy farmers using organic fertiliser, funds would be obtained from a supplementary estimate for the purpose.

Ranasinghe said that it was wrong to state that the government shifted from chemical to organic fertiliser abruptly. The government had promised to do so in its election manifesto and people had approved it by giving a two-third majority of votes for that. The UNP too had planned to adopt organic fertilisers in place of chemical fertilisers some 30 years back.

The State Minister said that during the past 30 years all the governments had spent billions of rupees to increase awareness of organic fertilisers among officials and the general public. In addition, there had been numerous projects introduced with the assistance of the World Bank to promote organic cultivation in the country.

Minister Ranasinghe said that there were chemical fertilisers, weedicides and pesticides and there was information that some traders sell them at exorbitant prices. The government would get the Consumer Affairs Authority and police to implement the law against the black marketers.

He said that some farmers had raised concern that nano-nitrogen fertiliser would be washed away owing to the heavy rains, but the government would supply that fertiliser again as it was promised by State Minister of Organic Fertilizer Sashindra Rajapaksa.

The meeting was attended by ministry officials and representatives of the farmers’ associations in the Polonnaruwa District.

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Arjuna quits UNP

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World Cup winning captain and former minister Arjuna Ranatunga yesterday quit the UNP over its failure to get its act together

Ranatunga has communicated his decision to leave the UNP to the Leader, Secretary, Deputy Leader, and the Assistant Leader of the UNP.

Ranatunga said, in a letter to the UNP leadership, that he decided to join the United National Front ahead of the 2015 presidential election to make a change for the common good.

He has said as the first step towards that objective he contested the 2015 general election and secured the highest number of votes from the Gampaha District.

Ranatunga said that when many left the party in 2020, he remained with the UNP in order to protect it.

He said in 2020 the UNP suffered a massive loss, “and what is required is to prepare a programme to overcome the present and future challenges”.

“However, as there seems to be no such preparation there appears to be no purpose in remaining with the party”, Ranatunga said.

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