Mahendran hits back




Former Central Bank Governor Arjuna Mahendran said a group of disgruntled Central Bank employees closely allied with a former Governor lobbied for his removal because he cancelled all the tamashas and excessive foreign travel enjoyed by a few of his select cronies. 


“During my period as Governor, I cancelled all the tamashas and excessive foreign travel enjoyed by a few select cronies of a former Governor. This is why these persons lobbied for my removal. They have effectively scuttled investigations into their shady practices from the past. These include buying Gold at very high prices, buying highly risky Greek bonds, advising the government to undertake a highly risky hedging strategy for petroleum imports and incurring huge losses for the Central Bank for three consecutive years by undertaking dubious foreign bank borrowings guaranteed by the Central bank,” he said in a statement.

 "A news item has appeared in the edition of your newspaper dated 6 Feb 2017 which carries the statements of various interested parties alleging various unsubstantiated issues against me. 


These statements are libellous in the extreme. They are based on extremely dubious and unverified sources. Nor has anyone in your newspaper approached me to find out my version of the story. 

The allegation that an internal audit report from the Central Bank of Sri Lanka has made comments that are unfavourable has never been brought to my attention. Such audit reports cannot be finalised until the accused party is given a fair hearing for his or her explanation of events. 

This is standard procedure in any government or private institution. Hence your story has no basis in fact. It has been stated by the Hon Minister of Finance that a group of disgruntled employees in the Central Bank of Sri Lanka who were closely allied with a former Governor are attempting to bring the current government’s policies into disrepute. This news item is an example of such activity. 

We have seen several previous instances in the past two years where confidential reports of the Central Bank have been disseminated to the press and social media to discredit the current government. It is clear that these disgruntled staff of the Central bank are trying to deflect attention away from their own wrong-doings of the past. 

The doctoring of GDP data, the expenditure of vast amounts of money on futile international media campaigns, the loss of over Rs.6 billion of state funds that were handed over by these same Central Bank officials to a now-bankrupt primary dealer are issues that these unscrupulous officials are attempting to hide. During my period as Governor I cancelled all the tamashas and excessive foreign travel enjoyed by a few select cronies of a former Governor. This is why these persons lobbied for my removal. They have effectively scuttled investigations into their shady practices from the past. 

These include buying Gold at very high prices, buying highly risky Greek bonds, advising the government to undertake a highly risky hedging strategy for petroleum imports and incurring huge losses for the Central bank for 3 consecutive years by undertaking dubious foreign bank borrowings guaranteed by the Central bank. 

The officials responsible for all these actions which resulted in several billions of dollars of losses to the country are still in very senior positions in the Central bank. If the Central Bank rules and procedures were subverted in any way as a consequence of my actions, there are ample fora to seek remedial action. His Excellency the President has set up a Commission of Inquiry with a broad mandate to investigate such matters.

 It is therefore highly unbecoming of your newspaper to take it upon itself to give vent to rumour-mongers and others whose ulterior motive is to bring disrepute to my erstwhile superiors, the Honourable Prime Minister and the Honourable Minister of Finance, by attacking my conduct and pre-judging the outcome of the deliberations of the Commission of Inquiry.

 For the record, all expenses incurred by me while serving as Governor of the Central Bank were made according to proper procedures and audited by the Auditor General’s department.




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