There is possibly of an insider information leakage from the part of Public Debt Department or otherwise when issuing Treasury Bonds, the Deputy Governor ex officio Chairman of the Tender Board P. Samarasiri said yesterday.
He said he believes the true reason behind the Treasury Bond issue is not the introduction of purely an auction system but a leakage of insider information.
The unusual bidding patterns taken place at the questioned Treasury Bond auction bear witness to the information leakage, Samarasiri said.
A proper examination of the bid sheet prepared for the auction held on February 27, 2015 will expose the unusual bidding patterns, he pointed out.
“When I examined the bid sheet of the questioned auction, I thought some people may have known that a higher volume than advertised will be accepted,” Samarasiri said.
“In previous bond auctions, the EPF bid has come first, which is not the case at the questioned auction. The EPF usually bid for the whole volume that is being advertised prior to the auction. In this case, they have bid at a later point and for a different amount,” he explained.
Samarasiri said the officers of the PDD or outsiders to the PDD who are in demanding decision making positions have divulged the insider information regarding the questioned auction to parties who are not entitled to have these information.
Samarasiri highlighted that the establishment of certain offices at the PDD can question the transparency with which they hold Treasury Bond auctions.
The front office which handles auctions, receives information that normally the back office has, such as bond maturing dates, market pressures and who have or have not money in their hands, Samarsiri pointed out.
“The front office, middle office and the back office of the PDD are all established in the same space. This is not the standard condition in setting up these offices. Back office should be in another department outside the PDD,” Samarasiri explained.
Supreme Court Justice P. Jayawardane then questioned Samarasiri as to why steps were not being taken to change the incongruities that he has noticed.
Samarasiri pointed out there is not yet an environment conducive for him to bring forth large scale reforms to PDD.
