- ASG Kodagoda observed those transactions may amount to criminal offences under the Monetary Act and the Money Laundering Act
- 2487 cheques amounting to Rs. 1134 million had been issued from WM Mendis & Companies during January 2015 to September 2016 which should be perused so as to ascertain the allegation of money trading against PTL: ASG Kodagoda
-Geoffrey Aloysius appeared in court and tendered asset statement relating to PTL
-Aloysius and Palisena re-remanded till July 19
By Shehan Chamika Silva
According to an interim report of the CBSL it was revealed that there were unusual secondary market transactions between Perpetual Treasuries Ltd and WM Mendis & Company which were not recorded in the CBSL system. ASG Yasantha Kodagoda said those suspicious transactions may be linked with cash cheques dispersed to various outside parties by PTL as the PTL’s transfer of money to WM Mendis & Company did not have a commercial value.
At the onset of the inquiry, complying with the previous court order, Chairman of the Perpetual Treasuries Ltd, Geoffrey Aloysius appeared in Court. He also tendered the asset statements of the PTL in Court as required previously.
However, it was explained that Mr, Geoffrey Aloysius will not represent PTL in the inquiry and therefore there will be no representation for the company which is the third suspect in the inquiry.
Additional Solicitor General Yasantha Kodagoda who appeared for the Prosecution thoroughly explained about a set of transactions that had taken place between PTL and WM Mendis & Companies (PTL's related group company) which were found as unusual secondary market transactions in an interim report given to the prosecution by the Central Bank of Sri Lanka.
The Central Bank is currently investigating on the money trading allegation against PTL with its related group companies, where it was alleged that PTL had dispersed cash cheques to the outside parties through its other related companies.
The interim report was relating to the above investigation of the CBSL as it had included an important finding during the investigation.
ASG Kodagoda, explaining the interim report's finding, elaborated the manner in which these alleged transactions had taken place.
He said there were particular transactions had taken place between PTL and WM Mendis & Companies which operated as PTL's secondary market Treasuries Bond transactions.
Explaining on the unusual nature of those transactions ASG pointed out that there were five categories namely REPO, REVERSE REPO, REPO ROLLOVER, REVERSE REPO ROLLOVER and OUGHT RIGHT secondary market transactions with WM Mendis & Companies between January 2015 to September 2016.
He said the transactions in such nature should be separately recorded in the RTGS and CDS computer systems in the CBSL contemporaneously in addition to the physical documents maintained by PTL on those transactions.
He said PTL had transferred considerable amount of money (sometimes Rs. 2 million per day) to the WM Mendis & companies as profits at the end of these bilateral transactions, which has no record in CBSL.
*PTL transact with WM Mendis & Companies in the secondary market with transactions said to have had no commercial value
*End of the every such transaction PTL transfers considerable money to WM Mendis & Companies
*Prosecution alleges these money transactions has a link when WM Mendis & Companies issuing cash cheques to outside parties without even sometimes not keeping official records with WM Mendis & Companies (such as vouchers relating to the such cheques)
*These transactions had not been recorded in the CBSL system which is a required as per law
ASG Kodagoda observed that it was a clear violation of Registered Securities and Stocks Ordinance and the section 62 of the Monetary Act of the country. He explained that it was a criminal offence relating to the securities.
ASG Kodagoda was of the view that these transactions could amount to an offence come under the Money Laundering Act in the event if PTL had transfered its profits gained through Bond scam to its related companies using this unusual transactions.
He maintained then the giver and also the receiver of these transactions could be culpable under the Money Laundering offence.
The interim report of the CBSL had found that those transactions were contrary to the contemporary market trends prevailed in the bond trading aswell.
Explaining the importance of these findings to the inquiry, ASG Kodagoda said that these unusual transactions which had not recorded even in the CBSL could be related with the cash cheques that WM Mendis & Companies had given to the outside parties through courier services.
He said there were 2487 cheques amounting to Rs. 1134 million had been issued from WM Mendis & Companies during January 2015 to September 2016 which should be perused so as to ascertain the allegation of money trading against PTL.
After the ASG's explaination Fort Magistrate Lanka Jayaratne observed the seriousness of the revelation and asked the prosecution whether CBSL had any supervision on such transactions.
ASG Kodagoda replied in a sarcastic manner "indeed an indepth study on such transactions was required but when we observe the time during which these transactions happened the father in law was the Governor of the CBSL".
ASG Kodagoda also said WM Mendis & Companies should posses the official vouchers relating to their issued cash cheques during January 2015 to September 2016. However, WM Mendis & Companies has said that some of the vouchers relating to their issued cash cheques were missing and only available in the computer system, said ASG Kodagoda.
Consequently, acceding the prosecution's request Court directed the WM Mendis & Companies to assist the CID to get details from the computer system of the WM Mendis & Companies relating to the issued cash cheques.
Meanwhile, ASG Kodagoda also informed court that the CID was unable to enter into the computer system of the PTL during its investigation as the software of the computer system is apparently crashed.
Subsequently, acceding the prosecution's request the Magistrate allowed the investigators to use the service provider's assistance in accessing into the system.
Meanwhile, Perpetual Treasuries Ltd owner Arjun Aloysius and its CEO Kasun Palisena were ordered to be re-remanded till July 19 by the magistrate 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.
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