ECONOMYNEXT - Sri Lanka's Prime Minister Ranil Wickremesinghe is ready to give evidence before a presidential commission inquiring into a series of securities scams in government bond markets, his office said.

"Prime Minister Ranil Wickremesinghe is prepared to offer clarifications at any time to the Presidential Commission of Inquiry into bond auctions in view of references to him during proceedings," a statement said.

"In line with its January 8, 2015 mandate, the government will investigate allegations made against it or its employees."

It is not clear how his testimony will be provided to the commission.

The commission of inquiry is going into a series of scams where bonds were sold at low prices (high interest rates) through a series of allegedly rigged auctions in 2015 and 2016 where Perpetual Treasuries, a gilt dealer connected to the son-in-law of then Central Bank Governor Arjuna Mahendran benefitted.

The bonds were then dumped at high prices (low interest rates) on the Employees Provision Fund, a private worker's retirement fund managed by the Central Bank and other state funds. According to evidence before the commission that several EPF dealers who bought the bonds back were paid millions of rupees in bribes from 2014.

Mahendran had testified that he conducted auctions on the instruction of the Prime Minister. The auctions were rigged by misleading the market that small amount of bonds would be sold, and then accepting multiples of the offered volume. The practice of accepting higher than offered volumes had been continueing at a lesser scale before 2015.

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