By The Pulseline News Desk
A landmark ruling by the Supreme Court has breathed new life into one of the country’s most controversial financial crime cases, clearing the way for the long-dragging Central Bank of Sri Lanka (CBSL) bond scam trial to proceed after years of legal uncertainty.
In a judgment delivered on Monday (1), the country’s highest court overturned a 2021 decision by a High Court Trial-at-Bar that had effectively halted proceedings under the Public Property Act against several accused linked to the Treasury bond scandal.
The ruling marks a significant victory for prosecutors and reopens a critical avenue of charges against key defendants, including former CBSL Governor Arjuna Mahendran, businessman Arjun Aloysius, Geoffrey Aloysius, former Finance Minister Ravi Karunanayake, and Perpetual Treasuries Ltd.
Justice Mahinda Samayawardhena, delivering the judgment with the concurrence of Chief Justice Preethi Padman Surasena and Justices A.L. Shiran Gooneratne, Achala Wengappuli, and Arjuna Obeysekere, had held that there is no legal impediment to continuing prosecutions under the Public Property Act against both the company and the individual accused.
At the heart of the dispute was a legal question that had delayed the case for years: whether a corporate entity could be prosecuted under legislation traditionally associated with offences committed by individuals.
In December 2021, the Trial-at-Bar had accepted a preliminary objection raised by defence lawyers, who had argued that Perpetual Treasuries Ltd, as a company rather than a natural person, could not be charged under the Public Property Act. The court’s acceptance of that argument had led to the dismissal of related charges against the remaining accused, creating a major setback for the prosecution.
The Attorney General challenged the ruling, first before the Court of Appeal and subsequently before the Supreme Court.
The Supreme Court’s decision has now decisively settled the issue. The judges have held that charges framed under Section 5(1) of the Public Property Act, read together with Section 386 of the Penal Code, are legally maintainable. The Court has further emphasised that under the Interpretation Ordinance, the term “person” can extend to include corporate entities such as companies.
Importantly, the judgment has recognised the evolving nature of financial crime in the modern era. The Court has observed that substantial losses to public property are not caused solely by individuals acting alone but can also result from sophisticated corporate and financial structures used to facilitate large-scale fraud.
Legal observers noted that the ruling could have implications beyond the bond scam itself, strengthening the ability of prosecutors to pursue corporate accountability in cases involving alleged misuse of public assets.
The case stems from the controversial Treasury bond auction of March 31, 2016, an episode that became one of the most politically charged financial scandals in Sri Lanka’s recent history. Allegations surrounding the auction had triggered multiple investigations, parliamentary inquiries, and years of public debate over governance, accountability, and financial oversight.
By directing the Trial-at-Bar to proceed with the case “as expeditiously as possible” under Section 450(5)(a) of the Code of Criminal Procedure Act, the Supreme Court has signalled its expectation that the matter moves forward without further delay.
For a case that has been mired in procedural battles and legal challenges for nearly a decade, today’s ruling represents a pivotal turning point. More than a simple procedural victory, it revives key charges that had been struck down in 2021 and restores momentum to a prosecution that many viewed as being at risk of indefinite delay.
As the Trial-at-Bar resumes proceedings, attention is likely to return to a scandal that has remained a touchstone in Sri Lanka’s debate over public accountability, corporate responsibility, and the rule of law.
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