Summary The bank sold 10 billion rupees ($76 million) of bonds in February at a coupon rate of 12.5 percent.
COLOMBO (AFP) - Sri Lanka s central bank chief has taken leave while a committee investigates allegations one of his family members benefited unduly from a $76 million bond auction, Prime Minister Ranil Wickremesinghe said Tuesday.
Newly appointed governor Arjuna Mahendran was on leave from Monday amid the probe into the sale of the 30-year treasury bonds, half of which were allegedly snapped up by his son-in-law.
"Mr Mahendran has taken a leave of absence from yesterday (Monday)" in the interests of transparency, Wickremesinghe told parliament, stressing that the official had not been asked to step down.
The allegations against Mahendran risk damaging new President Maithripala Sirisena who won elections partly on accusing his predecessor of cronyism and corruption.
Mahendran, who took charge of the Central Bank of Sri Lanka after Sirisena s win in January 8 elections, could not be contacted for comment.
The bank sold 10 billion rupees ($76 million) of bonds in February at a coupon rate of 12.5 percent, after earlier indicating to the market that one billion would be sold at 9.5 percent.
The opposition and local media have alleged the bonds were issued at an above-market interest rate and that Mahendran s son-in-law s company bought about half.
They allege the relative benefited from inside information about the rate and volume of bonds the bank planned to issue.
The opposition JVP, or People s Liberation Front, has demanded the sacking of Mahendran, a Singapore national of Sri Lankan origin, accusing him of helping his son-in-law make an undue profit.
The allegations come after Sirisena s government set up a special police unit to investigate large-scale corruption during former strongman Mahinda Rajapakse s decade-long presidential rule.
