Bond case against Arjuna Mahendran, Ravi Karunanayake and others revived as Supreme Court orders daily trial without delay.
The bond case linked to the 2016 Central Bank bond issuance has returned to the courtroom spotlight after the Supreme Court set aside an earlier High Court order that had cleared several key defendants.
The Supreme Court has overturned the order issued during former President Ranil Wickremesinghe’s tenure by a three-judge Colombo High Court bench, which had dismissed charges filed against Perpetual Treasuries, former Central Bank Governor Arjuna Mahendran, former Finance Minister Ravi Karunanayake, and several other defendants.
The country’s apex court has now ordered that the trial be recommenced without delay.
A five-judge Supreme Court bench has also instructed the High Court that this case, which had a serious impact on the national economy and remains a matter of significant public importance, should be heard on a daily basis unless a special circumstance arises.
The Attorney General had filed the case alleging that financial loss was caused to the government through the improper use of state funds during the controversial bond issuance carried out by the Central Bank of Sri Lanka on March 31, 2016.
Charges had been filed before the three-judge Colombo High Court under the Public Property Act against ten defendants, including Perpetual Treasuries, Arjuna Mahendran, Ravi Karunanayake, Arjun Aloysius, Kasun Palisena, and Geoffrey Aloysius.
However, when the case was taken up for trial on December 6, 2021, the three-judge High Court bench upheld a preliminary objection raised by the defence.
The defence lawyers argued that since Perpetual Treasuries was not a natural person, charges could not be maintained against the company under the Public Property Act.
Accepting that argument, the High Court decided that the case could not proceed against the main company or against the other defendants who were accused of aiding and abetting it. Accordingly, the defendants were acquitted of all charges.
Challenging the High Court decision, the Attorney General first filed an appeal before the Court of Appeal and later before the Supreme Court.
After considering the appeal, the five-judge Supreme Court bench ruled that although a company is a corporate entity, it should be considered a person under the Interpretation Ordinance.
Delivering the judgment, Justice Mahinda Samayawardhana emphasized that there is no legal barrier to filing criminal charges against a company under Section 5(1) of the Public Property Act, when read together with Section 386 of the Penal Code.
The Supreme Court further clarified that secret and complex financial frauds are not committed only by natural persons. Such offences can also be carried out through individuals operating behind corporate structures, causing massive losses to public property.
The judgment also noted that while a company cannot be sentenced to imprisonment, legal provisions allow convicted parties to be punished through fines.
During the appeal hearing, Deputy Solicitor General Janak Bandara appeared on behalf of the Attorney General.
A team of lawyers including President’s Counsel Faiz Musthapha, Faiza Marker, Naveen Marapana, and Shavindra Fernando appeared for the respondents.
The Supreme Court has now ordered the High Court to expedite the relevant trial under Section 450(5)(a) of the Criminal Procedure Code.
With this ruling, one of Sri Lanka’s most politically and economically sensitive financial cases is set to return to trial, with the Supreme Court making clear that proceedings must move forward without further delay.
