Is the CB Governor Mahendren now working on a 500 Million US Dollar Bond issue?

Tuesday, 17 March 2015 

Market is speculating that the controversial Central Bank Governor Arjuna Mahendren is running round the world from Singapore to USA to pick the lead managers for a U.S. dollar bond issue. Sri Lankan government according to insiders is planning a sovereign bond sale very soon. Sri Lankan Central Bank according to them is planning to go the markets with a 1.5 billion US dollar bond.

A cabinet paper was presented by the government before the controversial rupee bond issue asking for authority to be given the central bank to look for lead managers and there too objections were raised by certain cabinet members on the issue and subsequently referred to parliament and approved. Unfortunately in Sri Lanka very few parliamentarians have the training to understand the complexity of such financial instruments and as a result there is a lot of room for bureaucrats to manipulate the proceedings and the issue there after.

This was a clear case in point with the Greek bond fiasco and many of the controversial US Dollar bond issues floated at very high rates during Nivard Cabral's tenure allegedly raking in illegal gains by the millions to many people connected to him. So far, CB Governor Mahendren has not investigated any of those transactions, nor any of the transactions involving the Employees Provident Fund. Market insiders fear that if the discredited Mahendren does not step aside until the bond issue is properly investigated by a competent team of professionals appointed by the President, the country's financial system will lose its credibility for good and totally baffled as to why Mahendren is desperately clinging on to his position given the public outcry for his immediate removal. Mr Mahedren who claims he has an Oxford education should at least live up to that tradition and fade away for good.