- Having listened to voice recordings of dealers witness says there were no negotiations visible
- Cross examination reveals considerable increase in EPF profit
- Mahendran’s Open Door policy resulted in many people being dumped
By Shehan Chamika Silva
Former Superintendent of the EPF, A. Jayalath today said that the prearranged transactions in the secondary market between the EPF and Perpetual Treasuries Ltd, had manipulated the market rate.
He made this statement based on voice recordings he had listened previously relating to the conversations that had taken place between dealers of the EPF, PABC and the PTL, where no negotiations were visible according to the witness.
He was of the view that the EPF was a significant entity in the secondary market transactions and therefore a manipulation of EPF will affect to distort the real market rate.
He said the dealer in the EPF has the authority to communicate and negotiate with the parties and therefore such dealers can deceive him also about the transactions.
When questioned by Justice Prasanna Jayawardena, the witness said such manipulations however can be picked up by now looking at the price movement using the Bloomberg system.
In the mean time, during the Cross-examination led by President’s Counsel Nihal Fernando and Counsel Romali Tudawe, who appeared on behalf of the Perpetual Treasuries Ltd, it was revealed that there was an increase in EPF’s profit in the year 2015.
The counsel mentioned the profit referring to financial highlights published in the EPF website and they pointed out that despite not having the private placement method through which the EPF was said to have gained more profits, there was a 12.3 % increase in the EPF profit in 2015/16 period.
Counsel Chanaka de Silva who appeared on behalf of former Governor Arjun Mahendran also cross-examined the witness.
In relation to a comment made previously by the witness that controversial dealer, Saman Kumara was a constant visitor to Mahendran’s office, Mr. de Silva asked the witness about the ‘Open Door’ policy maintained by then Governor allowing anyone to meet him.
The witness said that even though Mr. Mahendran was maintaining such an ‘Open Door’ policy the people who went to meet him ended up finally in the ‘pool’. The witness was of the view that that many people after this policy have been thrown in to the dump.
Meanwhile, when the counsel questioned the witness over his previous comment on Mahendran’s alleged threat, the witness said that was what he felt from the tone of the governor and the way in which he asked him to appoint Saman Kumara to the front office of the EPF.
He said according to his understanding he was intimidated and under duress after Mahendran asked him to do such an appointment.
“He said to do it”, witness said. “So what is the threat of it”, the counsel asked.
When counsel asked whether the witness had requested the direction in writing, the witness said if he had asked for such he would have been fired from the CBSL.
Further cross examination to be conducted tomorrow afternoon.
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