Bond scam: Sri Lankan President disappointed over Singapore's "inaction"

Sri Lankan President Maithripala Sirisena Monday expressed disappointment at Singapore for not responding to a request to hand over its national who is wanted in the alleged 'bond scam' of the country's central bank. Former Central Bank Governor Arjuna Mahendran has been accused in a probe appointed by Sirisena of passing inside information to his son in law Arjuna Aloysius, whose firm purchased more than 50 per cent of the bonds auctioned in 2015.

The transaction is popularly known as the 'bond scam'. Addressing the launch of his new 5-year plan to eradicate bribery and corruption, Sirisena said he was disappointed over Singapore's "inaction". The president said during his last visit to Singapore he had asked Prime Minister Lee Hsien Loong on the need for Mahendran to be brought back to Sri Lanka to face justice. "Nothing has happened and I am disappointed at the inaction," Sirisena said.

"At least the government of Singapore should clarify as to whether this individual is living in their country or not," he said. The president appears keen to press on the issue as it is a likely that he and Prime Minister Wickremesinghe would be rival candidates when the next presidential election would be called later this year. Interpol served Mahendran with a Red Corner Notice after Sirisena's probe panel on the bond issue scam came out with a report in January last year. His son in law and his company CEO were remanded in custody in February last year and were released on January 1 this year.

Sirisena appointed the commission to probe any irregularities in the issues of Central Bank bonds in February 2015 and March 2016. Aloysius' firm Perpetual Treasuries it was alleged had benefited from insider information on the two issues of bonds resulting them making large profits. The opposition cried hoarse on the scam even demanding that Wickremesinghe resign. Sirisena in mid-2016 sacked Mahendran from the bank.

Sirisena had appointed Sri Lanka-born and now a Singaporean national Mahendran to the job on Wickremesinghe's advice. The alleged scam rocked the government headed by Sirisena and Wickremesinghe. The issue was the first which triggered differences between the leaders of the unity government. Sirisena sacked Wickremesinghe as prime minister late last year, creating a constitutional impasse which lasted nearly 2 months.

(With inputs from agencies.)