COLOMBO: A panel set up to investigate a suspect auction of Sri Lankan government bonds said on Sunday that it had cleared the central bank chief of any direct role, while calling for tighter supervision of the government's borrowing office.
Central Bank Governor Arjuna Mahendran has taken a voluntary leave of absence while awaiting the outcome of the probe into the Feb. 27 auction.
The government raised more than 10 billion rupees ($75.2 million) from a 30-year treasury bond at 11.73 percent, after initially offering just 1 billion rupees with an indicative price of 9.5 percent.
The three-member investigative committee appointed by Prime Minister Ranil Wickremesinghe said it had observed several deficiencies in the central bank's Public Debt Department (PDD), the government's local and international borrowing office.
"Since the PDD is dealing with the most sensitive information of the government, the committee is of the opinion that a proper supervisory and monitoring mechanism has to be immediately implemented with regard to its activities," the Ministry of Policy Planning and Economic Affairs said in a press release quoting the committee's findings.
"However, the committee found that Governor Arjuna Mahendran had no direct role in deciding to accept bids over and above one billion rupees stipulated in the 30-year bond tender and accept up to 10 billion rupees."
Mahendran, a Sri Lankan-born Singapore national, was questioned by Sri Lanka's anti-corruption authority on Thursday and banned from travelling abroad.
The Committee said further investigation was needed into what it called the unusual bidding pattern of Perpetual Treasuries, a dealing house that took part in the auction.
A spokesman for Perpetual Treasuries, contacted by Reuters, said it had no comment on the report, but would offer one on Monday.
Besides the Mahendran investigation, Wickremesinghe has also launched an inquiry into allegations of corruption in government bond sales by the central bank since 2012.
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