President under pressure to sack banker

central bank 2The government should sack Sri Lanka’s Central Bank chief Arjuna Mahendran if his conduct has been found “undesirable”, the country’s Petroleum Minister today demanded amid allegations that the top banker’s son-in- law benefited unduly from a USD 76 million bond auction.

The demand has piled pressure on President Maithripala Sirisena, who won elections in January last year on a promise to end cronyism and corruption, from his own Freedom Party.

“If (Mahendran’s) conduct had been found undesirable he should be removed for the good of the President and the Prime Minister,” Minister of Petroleum Chandima Weerakkody said.

Mahendran, who was appointed as Central Bank Governor by Prime Minister Ranil Wickremesinghe, has been under fire since March last year after his son-in-law was accused of unduly benefiting from a USD 76 million bond auction.

The opposition and local media have alleged that the bonds were issued at an above-market interest rate and that a company owned by Mahendran’s son-in-law bought about half of the bonds.

They allege that the family member benefited from inside information about the rate and volume of bonds the bank planned to issue.

The Central Bank governor, whose term is set to end at the end of this month, has denied any wrongdoing. (Business Standard)

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