The Supreme Court today overturned a 2021 High Court ruling that had discharged all ten accused in the 2016 Central Bank bond issuance case – popularly known as the Bond Scam – ordering that the prosecution proceed under the Public Property Act.
A ruling was delivered by Supreme Court Judge Mahinda Samayawardena, who was part of a five-judge bench, which included Chief Justice Preethi Padman Surasena.
Among the accused were former Finance Minister Ravi Karunanayake, former Central Bank Governor Arjuna Mahendran, and Perpetual Treasuries Limited, the company which the previous Trial-at-Bar had ruled could not be prosecuted under the Public Property Act.
Context
In December 2021, the High Court Trial-at-Bar – a special three-judge panel – discharged all ten accused from the most serious charges of the case.
The defence argued that Perpetual Treasuries Limited, being a company and not a natural person, could not be prosecuted under the Offences Against Public Property Act and that if the company could not be charged, the charges against the individuals connected to it should be discharged.
The Trial-at-Bar agreed and discharged the accused.
The Attorney General's appeal to the Court of Appeal was rejected the following year, on the grounds that it did not have the jurisdiction to hear the appeal.
In April 2022, the Attorney General filed an application for special leave to appeal at the Supreme Court – essentially asking permission from the Supreme Court to bring the case before it for a full hearing.
The Supreme Court issued an interim order staying the High Court Trial-at-Bar proceedings, and in 2023 formally granted leave to appeal – allowing the case to be heard before a five-judge Supreme Court bench.
After years of delays, the case was finally argued – albeit before a different five-judge bench to the one appointed in 2023 – with the judgment delivered today.
The Bond Scam
The Bond Scam refers to alleged irregularities during treasury bond auctions conducted by the Central Bank of Sri Lanka in 2015 and 2016.
A Presidential Commission of Inquiry found that the state suffered losses of approximately Rs. 11 billion across the 2015 and 2016 auctions combined.
Suspicion centred on Perpetual Treasuries Limited -- a licensed primary bond dealer owned by Arjun Aloysius, the son-in-law of the then Central Bank Governor Arjuna Mahendran.
It is widely regarded as one of the largest alleged financial frauds in Sri Lanka's history.
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