Sri Lanka seeks extradition of ex-central bank chief from Singapore

By Shihar Aneez

COLOMBO (Reuters) - Sri Lanka will ask Singapore to extradite former central bank governor Arjuna Mahendran in connection with an insider trading investigation, a Foreign Ministry official said on Tuesday.

Mahendran, a Singapore national, has failed to appear before a Sri Lankan court despite being summoned over allegations of malpractice during a 30-year-bond sale in 2015 when he led the central bank.

The auction was originally planned at a modest 1 billion rupees but then scaled up by a factor of ten to meet government borrowing needs, resulting in a spike in the borrowing cost.

"We will transmit the extradition request through our embassy in Singapore once the defence ministry authenticates the documents given by the Attorney General Department," a Foreign Ministry official told Reuters.

Mahendran could not be reached for comment on Tuesday. He has previously denied any wrongdoing.

President Maithripala Sirisena in the past has accused Singapore of not helping to extradite the Sri Lankan-born Mahendran, who left for Singapore early last year after a promise that he would return to face trial.

The Singapore government said in March it was waiting for proper documentation from the Colombo government to pursue the extradition process.

Mahendran, a close ally of Prime Minister Ranil Wickremesinghe, was handpicked for the central bank governor post despite opposition from Sirisena.

In March, Sri Lankan police arrested a former central bank deputy governor and four board members of primary dealer Perpetual Treasuries Ltd for their suspected involvement in the alleged government bond scam.

In February 2018, police arrested Arjun Aloysius, owner of Perpetual Treasuries and an ex-central bank deputy governor as well as Mahendran's son-in-law, over the same case. Aloysius has also denied wrongdoing and was freed on bail early this year.

(Reporting by Shihar Aneez; Editing by Alasdair Pal and Mark Heinrich)