Misleading Claim on Arrest of Arjun Mahendran!

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Social media was abuzz with claims that former Central Bank Governor Arjun Mahendran had been arrested. Let’s look at these claims first.

Social Media Posts :

Social media posts went viral, indicating that “Arjun Mahendran got arrested in Singapore”.

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Here is how it was widely shared.

We decided to find the credibility of these posts.

Fact Check :

We first checked whether the mainstream media had reported that former Central Bank Governor Arjun Mahendran had been arrested. However, no such news was reported.

Defense Ministry

We inquired with the Ministry of Defence regarding this matter, and the Director of Media and Spokesperson for the Ministry of Defence, Brigadier F. Joseph, stated that no such information has been received and that the information is false.

Police Media Spokesperson

We also inquired with the Acting Police Media Spokesperson, Assistant Superintendent of Police Minura Senarath, to further clarify this, and he stated that this information is false and that Arjun Mahendran has not been arrested yet.

We investigated the source of this false information. We found that on the 26th, during a program on the Swarnavahini Television Channel, Public Security Minister Ananda Wijepala was questioned by a journalist regarding the arrest of Arjun Mahendran. In response to this question, the Minister states that he has not given up on his efforts to arrest the former Central Bank Governor, Arjun Mahendran. 

He also states that since Arjun Mahendran has changed his name and is living there as a Singapore citizen, the laws of that country have become an obstacle to his arrest. You can watch the program below.

Mahendran was accused of causing a loss of 1000 million rupees in the 2015 Central Bank Bond Scandal. Perpetual Treasuries Limited, owned by Arjun Aloysius, the son-in-law of Arjun Mahendran, was accused of being the primary beneficiary of the bond scam, alleging that fraud had occurred in the issuance of government bonds on February 27, 2015, when Mahendran was serving as the Governor of the Central Bank of Sri Lanka. It has been over 10 years since the most controversial treasury bond auction in the country’s capital market history.

The Attorney General’s Department had previously attempted to bring Mahendran back to the country, but there had been no positive response from the Singaporean authorities.

The Colombo Magistrate’s Court had issued a notice to Mahendran to appear before the court in connection with a case filed by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC).

This case was filed regarding the misuse of bonds.

In addition, the Colombo three-judge bench had issued a warrant through the Police to arrest Mahendran in connection with the Central Bank bond scam. The Colombo Magistrate’s Court had also issued a notice to appear before the court on September 26.

President Anura Kumara Dissanayake mentioned before the last Presidential election that necessary steps would be taken to bring Mr Mahendran back to the country. The President emphasised that it is one of his priorities.

After the presidential election, the then Cabinet Spokesperson and Minister of Foreign Affairs, Vijitha Herath, explained to the media that the Ministry of Public Security had also initiated legal investigations into the bond scam, taking into account the findings of the Presidential Commission of Inquiry and the Parliamentary Select Committee.

For the auction held on February 27, 2015, a total of Rs. 1,000 million worth of Treasury bonds were offered. At that time, the prevailing interest rate in the bond market for similar debt instruments was approximately 9.50%. More information on this can be found here and here.

We look forward to updating you with confirmed information if former bank governor Arjuna Mahendran has indeed been arrested.

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Conclusion :

The security forces have confirmed that reports stating that former bank governor Arjun Mahendran, accused of causing a loss of Rs. 1 billion in the 2015 bond scandal, has been arrested in Singapore are false.