Sri Lanka’s former finance minister Ravi Karunanayake faces allegations of graft and purgery for receiving a luxury apartment from a controversial bond dealer
Sri Lanka’s former finance minister should face bribery charges, the president said yesterday, following a government investigation into a multi-billion rupee insider trading scandal at the island nation’s central bank.
President Maithripala Sirisena, who ordered the probe early last year, recommended that former minister Ravi Karunanayake be criminally prosecuted for graft and purgery amid allegations he received a luxury apartment from a controversial bond dealer.
The 11-month investigation conducted by two Supreme Court judges and a former auditor general found that bond dealer Arjun Aloysius, the son-in-law of then central bank governor Arjuna Mahendran, made undue profits in the market.
It recommended a forensic audit of the central bank to quantify the exact losses to the state, while noting that Aloysius’ profits were at least Rs11.14bn ($75mn) during a five month period between 2015 and 2016.
It held Mahendran responsible for leaking sensitive information and said it wanted the state losses recovered from Aloysius and several other public officials it identified
as being involved in the scam.
Karunanayake was removed from his post as finance minister following the revelations and assigned to the foreign ministry, before being forced to resign from the cabinet in August.
The investigation sparked tensions between Sirisena and his Prime Minister Ranil Wickremesinghe, who had handpicked Mahendran - a Singapore national of Sri Lankan origin - to head the central bank when the new government came to power in January 2015.
When Mahendran’s tenure ended in June 2016, the president denied him an extension and overlooked Wickremesinghe’s alternative candidate, causing more friction within their
troubled ruling coalition.
The two top men have had several clashes over economic policy, with Sirisena publicly accusing Wickremesinghe’s United National Party (UNP) of being more corrupt than the previous regime they toppled together.
The investigation also recommended a forensic audit of the central bank to cover the period under former strongman president Mahinda Rajapakse, saying insider trading had been going on under his rule since 2008.
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