Ranil Wickremesinghe: The Corruption Scandal that tarnished Sri Lanka’s ‘Mr Clean’

Colombo: Ranil Wickremesinghe is the new President of an embattled Sri Lanka that was recently plunged into political and economic turmoil by mismanagement and short-sightedness of the Rajapaksa dynasts, who are practically on the run.

Having earned the nickname of ‘The Fox’ for his acumen of reviving his repeatedly sagging political fortune in Sri Lanka, Ranil Wickremesinghe, six-time prime minister since he entered politics in 1977, has had to face corruptions allegations too, and serious ones at that.

In 2015, Ranil Wickermesinghe was accused of being involved in an insider trading scam at the Sri Lankan Central Bank. He always maintained his innocence. This scam broke after He was sworn in as prime minister again in 2015 after the election defeat of president Mahinda Rajapaksa after the opposition rallied behind him as a unity candidate.

What fuelled the air of credence to his involvement in the while affair was the fact that Arjuna Mahendran, Wickremesinghe’s school friend and choice for the job, was back then at the centre of the scam.

Also, called The Bond Scandal, the whole affairs tarnished the image of Sri Lanka and shook the confidence of international investors in the country. Reports from back in 2015 say that foreign investors were rather unmoved in their assessment of Sri Lanka as mired in corruption even after prime minister Wickremesinghe and his other senior colleagues had appeared before a commission of inquiry as a mark of good governance.

President Sirisena had appointed the commission to investigate the sale of the bonds after opposition lawmakers went up in arms for an independent inquiry. The Opposition had claimed that the bond issue had, adversely, raised government borrowing costs by over $1 billion over the two years. This was when, according to reports, Sri Lanka back then had just just $7 billion in foreign currency reserves, while payments of over $5 billion were to be due starting 2019.

THE BOND SCANDAL

According to Nikkei Asia, it was revealed that the Central Bank had decided in late February 2015 to raise 10 billion rupees against the sale of 30-year government bonds. The bonds came at a fixed interest rate of 12.5%. The bank had initially announced an offer of 1 billion rupees with a 9.5% fixed interest rate.

Perpetual Treasuries Limited, owned by Arjun Aloysius, a son-in-law of then-governor of the central bank Arjuna Mahendran, scooped up bonds worth 7 billion rupees. Here to be recalled is the fact that Mahendran was Ranil Wickrmesinghe’s schoolmate, who was also chosen by Wickremesinghe to lead the apex bank.

All accused, of course, denied and rejected all insinuations of wrongdoing, though the conflict of interest angle stuck.

However, the Wickremesinghe government said back then that it needed funds to service debts of over 10 billion rupees inherited from the previous Rajapaksa administration to be spent on infrastructure. The debts had to be repaid by the first quarter of 2015.

Witnesses before the Bond Commission pointed to a deep nexus between capital and politics, involving the uber-wealthy sections of the country. While Mahendran, denying the allegations, stepped down in 2016 and was found “directly responsible” after an 18-month-long probe by a parliamentary committee on public enterprises, not much could come of it that could stop Ranil Wikremesinghe in his tracks in Sri Lankan politics.

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