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Rajapaksa and Cabraal associates involved in $ 500 m ISB? 

18 Jan 2022

  • Handunnetti, Piyadasa question rush in making payment amid forex shortage
By Shenal Fernando Sri Lanka Freedom Party (SLFP) Senior Vice President Prof. Rohana Lakshman Piyadasa and former Janatha Vimukthi Peramuna (JVP) politburo member Sunil Hadunnetti had alleged that the Central Bank is attempting to bankrupt the country by settling the International Sovereign Bond (ISB) payment at a time when it cannot afford to do so, because the friends and associates of the Rajapaksa family and Central Bank of Sri Lanka (CBSL) Governor Ajith Nivard Cabraal have purchased the maturing bonds. Allegations are that they have purchased the ISBs on the secondary market at a discounted rate with the assurance that the repayment will be made as per schedule. Speaking at a press conference on Sunday (16) Piyadasa alleged that CBSL Governor is going ahead with the payment of the $ 500 million ISB which is due today (18) at a time when the country’s dollar reserves are at critical levels, instead of attempting to negotiate with the bond holders as advised by economists. He further claimed: “Recently the CBSL Governor claimed that the $ 500 million ISBs will be repaid. Who invested in the $ 500 million ISBs? People do not know these things. They think the Government is getting ready to pay off the debt.” He further claimed: “Every economist in the world is currently stating we don’t have to pay the bonds right now and to ask for time to pay for bonds. Every country in the world in a similar situation is asking for time to pay off debts.” According to Piyadasa, the politicians in the Government are making fools out of the public and are hoodwinking them into believing that they are paying off loans when in fact they are not. Similar assertions were made by Janatha Vimukthi Peramuna (JVP) politburo member and former parliamentarian Sunil Handunnetti.  “The reason why they are so earnest to pay off the ISBs on 18 January is not to save the country from a debt crisis. Things are already at a critical point; it doesn’t matter whether they pay or not there is already a crisis. What they are actually trying to do is that, there are people in Sri Lanka who have brought these bonds. When bonds are purchased in the secondary market, we have no idea of the purchaser’s identity. Bonds can be easily purchased; they have been shared among these close friends. Do you understand what’s happening? This is how you make money from a crisis.” He claimed that: “Keeping a Sri Lankan bond in one’s hand is similar to keeping a bomb – as the holder does not know when it would cause loss or when it would lose its value.” Therefore, once the date of maturity of the bond comes closer the bond holder would look to get out of it considering the deteriorating economic situation of Sri Lanka and the likelihood of default. “But the possible conspiracy is that if the final holder of the ISB and the party paying the bond upon maturity were to collude they can certify payment of the bond even if it bankrupts the country in exchange for a commission in return,” claimed Handunnetti. However, he did admit that he has no proof of the allegations as nobody knows who the final holders of the ISBs are. But referring to the Bond Scam that took place during the tenure of former CBSL Governor Arjuna Mahendran and Perpetual Treasuries Ltd. Director Arjun Aloysius, Handunnetti alleged that it is similar to the conspiracy alleged above and that he would wager that a similar incident will take place with regard to the $ 500 millions ISB payment due on 18 January.


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