Arrest warrant issued on Mahendran

- Sufficient grounds to believe suspect absconding: Fort Magistrate

- Aloysius and Palisena re-remanded till March 29

By Shehan Chamika Silva

Drawing the consideration based on the sufficient materials filed in court, Fort Magistrate Lanka Jayaratne yesterday issued an arrest warrant on former CBSL Governor Arjuna Lakshman Mahendran as he seems to be absconding the court and unlikely to be obeyed with further court notices that to appear before the CID.

The Prosecution stated court that it had taken sufficient steps appropriately to inform the suspect who is residing in Singapore about the court order that to appear before the CID. Therefore they said there are enough grounds to believe that suspect Mahendran is absconding the court hence an arrest warrant be issued against him.

In compliance with the Criminal Procedure Code. the Magistrate before issuing the warrant,directed the prosecution to lead evidence of the CID official Sanjeewani Keppettige IP, who dealt with process of sending notices to Mahendran,

Magistrate Lanka Jayaratne observed the fact that the prosecution had leveled allegations against suspect Mahendran under the Public Property Act and the Penal Code based sufficient materials and that the court can issue an arrest warrant against the suspect under the section 63 of the Criminal Procedure Code before the suspect being charged (giving a charge sheet to suspects) in the magisterial inquiry.

The Magistrate also considered the facts that daughter of the first suspect (Mahendran) in a statement had said that his father was aware about the notice and that second suspect Aloysius is also the son in law of Mahendran hence the court has sufficient grounds to believe that the suspect was aware of the notice.

Subsequently, an arrest warrant issued in both Sinhalese language ( to be used locally) and English language ( to be used internationally).

Filing a further report in Court, the prosecution sought several court orders to intensify the magisterial inquiry conducted over the misappropriation took place during the Treasury-Bond auction held on February 27, 2015.

Acceding the prosecution's request the Magistrate issued court orders to the relevant authorities of Etisalat, Dialog, Mobitel and Telecom service providers to provide communication details pertaining to several concerning individuals mentioned in the B report by the prosecution.

The prosecution requested the Court to send a notice to the relevant authority of the Perpetual Treasuries Ltd (PTL) to send a representative on behalf of the company which is also made liable and the third suspect in the inquiry for the offences commttied under the Registered Stocks and Securities Ordinance as it was required under the section 261 of the Criminal Procedure Code.

However, Counsel Jeewantha Jayathilake who appeared for the defense stated that fourth suspect Kasun Palisena who is the Chief Executive Officer of the PTL can represent the company as well.

Additional Solicitor General Yasantha Kodagoda PC who appeared for the prosecution objected that and held that Kasun Palisena is already a remanded suspect to the inquiry and in the event if he represents the PTL too, there could be possible impediments to the inquiry in a way of conflict of interest.

The Magistrate however decided to peruse the legal aspect of the situation further and fixed the order to be delivered on next hearing.

The prosecution also requested the court to direct suspects Kasun Palisena and Arjun Aloysius to provide a comprehensive report on their assets in expectation of identify the final destinations of the illegal profits gained by the PTL in Bond transactions.

However, Counsel Jayathilake objected to it and maintained that his clients are not Government Officials who should give such declarations hence not legally bound to do so.

ASG Kodagoda PC said that the prosecution requires only a report on suspects' assets and that report would not be even used as evidence in the inquiry since the prosecution needs only to identify the certain assets owned by the suspects.

ASG Kodagoda however informed the court that the prosecution had identified a Rs. 150 million fixed deposit of WM & Mendis being lifted very recently by a private bank to over draw its credits. He said This transaction took place because the previous prevention order given on transferring assets of Perpetual Group did not included the fixed deposits owned by the other associated companies. ASG Kodagoda also said it was very important to identify the current form of the money that PTL gained illegally.

The Magistrate fixed the next date to deliver an order on the request.

Meanwhile, the Perpetual Treasuries Ltd owner Arjun Aloysius and its CEO Kasun Palisena were ordered to be re-remanded till March 29 by Fort Magistrate Lanka Jayaratne over the magisterial inquiry in which they were accused of abetting and conspiring with Arjuna Mahendran to misappropriate public funds worth Rs. 688 million during the Bond auction held on February 27, 2015.

The Prosecution alleged that Arjuna Mahendran as the main responsible figure in CBSL (former Governor) upon whom the element of entrust of the Government securities was assigned with as per the Monetary Law Act had failed to exercise his duty to raise borrowings to the Government on 'least cost' as he had associated with his son in laws company by providing price sensitive information.

Therefore the Prosecution leveled allegations against the former governor under the sections 386 and 388 of the Penal Code over criminal misappropriation and criminal breach of trust.

The prosecution also leveled charges against Arjuna Mahendran under the sections 8(1) and 5(1) of the Public Property Act over the misappropriation of public funds (in this case government securities).

The Perpetual Treasuries Ltd owner Arjun Aloysius and its CEO Kasun Palisena were also made liable under the Public Property Act and the Penal Code for abetting and conspiring with Mahendran to misappropriate the public funds.

It was explained that a Magistrate cannot release them on bail as per section 5 and 8(1) of the Public Property Act, where one who misappropriated public properties or assets causing more than Rs. 25,000 has no bail relief unless exceptional circumstances or by a High Court Judge.

The prosecution also leveled allegations against ‘Perpetual Treasuries Ltd’, Arjun Aloysius and Kasun Palisena for engaging in illegal ‘insider dealing’ by obtaining price sensitive inside information, which is deemed to be a punishable and prohibited conduct under section 56 (1) of the Registered Stocks and Securities Ordinance and the Code of Conduct for Primary Dealers by the CBSL. (Punishment was five years of imprisonment).

They alleged that Arjuna Mahendran had also helped PTL to get insider information and therefore made him also liable under the offence of ‘Abetment’ for ‘insider dealing’ under the Penal Code.