Sri Lankan Foreign Minister quits in bond ‘scam’

Colombo: Sri Lanka’s foreign minister Ravi Karunanayake resigned on Thursday over corruption allegations after being linked to a businessman under investigation for alleged irregularities at a government bond sale. Mr Karunanayake, 54, told Parliament that he was resigning from the Cabinet to create a new political culture in Sri Lanka and ensure that opponents are not able to destabilise the government. 

“I am resigning not with any guilt but with pride,” Mr Karunanayake said and dismissed allegations of corruption. Last week, Mr Karunanayake appeared before a presidential commission of inquiry in connection with the bond sale scandal in 2015.

Perpetual Treasuries Ltd, a subsidiary of a company owned by the son-in-law of Sri Lanka’s then-central bank chief Arjuna Mahendran, bought more than half of the controversial bond issue on February 27, 2015, prompting charges of a conflict of interest. Mr Mahendran and his son-in-law, Arjun Aloysius, have denied any wrongdoing. Mr Karunanayake is accused of taking on lease a luxury apartment in Colombo paid for by Aloysius of Perpetual Treasuries.

Mr Karunanayake said his daughter had struck a deal with the apartment owner who was linked to the company under probe over bond sale. Aloysius’ company had allegedly benefited by insider information on the two Central Bank bond issues in 2015 and 2016. Sri Lankan President Maithripala Sirisena, who came into power promising to end corruption, has been under pressure to act against Mr Karunanayake.