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Dec 31, 2016

Probe into underhand deal in Seylan Bank share sale Featured

Prime minister Ranil Wickremesinghe had mediated to cancel the sale of the Bank of Ceylon-owned shares of the Seylan Bank after he received a complaint that a top official of the BoC had tried to pocket Rs. 2.00 per share in an underhand deal, say government sources.

The PM has called for a confidential report including details of parties to this deal.

Reliable sources say two powerful ministers had mediated to cancel the share sale, who have informed the PM that the per share value could have been Rs. 110 at the time of the sale.

BoC claims sale was legal

However, BoC sources claim the sale had taken place in accordance with the law.

The sources say the shares, bought at Rs. 30 per share in 2009, were sold at Rs. 100 each to earn a 300 per cent profit for the BoC.

The Sri Lankan businessman who had introduced Japanese businessman Motohiko Momma for the share sale is reportedly Prins Gunasekara, a close friend of UNP provincial councilor Niroshan Padukka.

The broker chosen by Gunasekara for the deal is JB Securities, whose managing director is Murtaza Jafferjee, a former chairman of CFA and a director board member of Nations Trust Bank.

Jafferjee is also a close friend of several government ministers and gave financial assistance to the UNP for its election campaigns.

After Prins and Homma had met him, Jafferjee has informed that the Seylan Bank shares would be bought at Rs. 100 per share.

A committee headed by deputy minister Eran Wickramaratne has approved the transaction, BoC sources confirm.

Need for proper mechanism

Following the decision to cancel the share sale, the Colombo share market experienced a downturn.

Financial analysts say very careful decision-making has to be made with regard to transactions of state-affiliate financial institutions, or else, investors would be discouraged from investing in the country.

President Maithripala Sirisena too, has paid his attention to the matter and echoed the same advice to the relevant officials.

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