Sri Lanka's President Maithripala Sirisena today said a commission he appointed to probe alleged irregularities in the sale of two treasury bonds has held the former governor of the coutry's central bank Arjuna Mahendren guilty of leaking sensitive market information.
Making public the findings of the Presidential Bond Commission report on television, he said that the panel has also recommended the prosecution of the country's former finance minister Ravi Karunanayake on bribery charges.
In what was dubbed by the Opposition as the "biggest financial scam in Sri Lanka's history", the commission probed a series of rigged bond auctions, in February 2015 and March 2016, conducted by the central bank under Mahendran in which his son-in-law's company Perpetual Treasuries allegedly made thumping profits by buying securities at low prices.
The former governor was accused of benefiting from insider information.
The probe panel recommended that Parliament must take speedy action to recover the losses through a new legislation.
"I would not hesitate to take steps to recover the loss of (Sri Lankan) Rs 11,145 million and take legal action against the offenders and punish them," Sirisena said in his televised speech.
He said that the Commission had found that Mahendran had intervened in an "improper" manner to provide internal information while taking improper decisions.
It has also recommended legal action against the former minister of finance and foreign affairs Karunanayake over lease of an apartment from the questionable company.
"He needs to be charged under the penal code for giving false evidence to the commission," the President said.
On the role of Prime Minister Ranil Wickremesinghe in appointing Mahendran as the central bank governor, he said "the Commission had found it proper."
Wickremesinghe, however, should not have trusted Mahendran on the information provided by him to the Prime Minister on the bond issue, the probe report stated.
Sirisena also said that he had already forwarded the probe report to the Attorney General for legal action.
The CID of the police and the anti-graft commission must take action against all those responsible for the scam, he added.
Karunanayake had earlier denied the allegation.