- Alleged pattern visible in PTL and EPF transactions: DSG
- Former PABC chairman sold bonds to EPF at a prearranged rate: witness
By Shehan Chamika Silva
Deputy General Manager of the Pan Asia Bank (PABC), R. A. B. Dias yesterday said that owner of Perpetual Treasuries Ltd, Arjun Alloysius, had asked him “to conceal vital information” when testifying before the Presidential Commission of Inquiry.
The revelation was made when the witness was questioned by Deputy Solicitor General Milinda Gunathilake regarding the previous testimony he gave about Mr. Alloysius’ request prior to him giving evidence before the PCoI.
The solicitation had been allegedly made during a meeting, which took place on June 30, 2017 at the residence of Mr. Alloysius with, who was the DGM of the PABC.
Earlier, it was revealed that the witness had visited Mr. Alloysius residence subsequent to the continuous phoned calls made by Mr. Alloysius demanding a short meeting with the witness prior to his testimony at PCoI.
“Mr. Arjun phoned me on June 30 and wanted to meet me, and he was pleading to meet me, I also wanted to meet him to get clarifications, and when we met he said next two weeks are crucial to him, therefore, need my support at PCoI proceedings ”, the witness said in his earlier evidence.
Meanwhile, during the cross- examination led by Mr. Nihal Fernando PC and Counsel Romali Tudawe the witness exposed certain matters regarding the Bonds that were sold to the EPF in the secondary market, where PABC acted as an intermediary.
According to the witness, during the intermediary process, the PABC had also sold Rs. 8.5 billion worth Government Securities of its former chairman, Nimal Perera and the securities belonging to his private company called ‘NP Capital’ to the EPF.
The amount was in relation with only 32 secondary market transactions, on which PTL lawyers had been cross examining the witness.
He explained that Mr. Nimal Perera had pre arranged the rates and prices at which the bonds would be sold to EPF. ‘He had negotiated with the EPF dealer, Saman Kumara directly about the rates and had informed PABC to confirm them and continue with the deals’, he said.
The PABC was handling the portfolio of its Chairman in the secondary market transactions.
When questioned by the Commission, the witness explained that apart from its former chairman there were five clients of the PABC who had sold Bonds to the EPF, where PABC acted as an intermediary.
Navara Capital, Virtual Investments, Tradies Holding, Vitavel Private Ltd and Trillion Securities were the companies which had dealt with PABC when selling bonds to the EPF in the secondary market.
Acceding the commission’s request, the witness agreed to provide details about the directors and the shareholders of those companies for the perusal of the PCoI.
It was explained that these clients of PABC had also sold bonds to the EPF at a rate similar to what Mr. Nimal Perera’s rates in selling bonds to the EPF.
He said that its dealers were negotiating with the EPF on behalf of its clients to decide the rates.
The witness said that Mr. Nimal Perera and Perpetual Treasuries Ltd had sold bonds to the EPF at a prearranged higher rate through PABC, and based on that the PABC also traded with its other clients in the intermediary process.
The witness said that there was a manipulation in market rate because of the long term bonds. “If we set a batting wicket in a cricket match, opposite team could also get the advantage of it, that is exactly what happened”, he said
He said the PABC gained only a nominal profit while the actual profits went to its clients during these transactions where the PABC acted as an intermediary.
Consequent to the questions made by PTL counsel Romali Tudawe regarding the 32 specific secondary markets transactions, which were reflected in a marked document at PCoI, the witness said that the information relating to transactions between the PABC and its clients during the intermediary process was not reflected in the document due to the shortcomings of its back office officials.
However, he said the information would be available in the bank’s internal records if wanted.
Pointing a specific transaction, which had been recorded in the document, the counsel questioned the reason for the contradictory practice of recording, and the Witness said that it was a mistake of the back office.
Re-examining the witness, the DSG told the commission that there was a pattern visible in the transactions where PTL sold bonds to the EPF through PABC because such instances there were other clients of the PABC exist in between those transactions.
The Commission also permitted the DSG to submit a document prepared by the Attorney General’s Department depicting the alleged pattern derived from the document that contains a large amount of secondary market transactions.
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