Sri Lanka bars central bank chief from foreign travel for three months

COLOMBO (Reuters) - Sri Lanka has imposed a three-month ban on overseas travel by its central bank governor, Arjuna Mahendran, who faces an investigation over alleged insider dealing, an official said on Saturday. Sri Lankan Prime Minister Ranil Wickremesinghe set up a three-member panel to investigate the alleged insider dealing at a Feb. 27 bond auction after opposition parties accused Mahendran of involvement and demanded an independent inquiry. The probe panel was scheduled to hand its findings to the prime minister on April 10, but the outcome has yet to be made public. "The Bribery Commission has asked to impose a travel ban on the central bank governor for three months," A. H. L. De Zoysa, a spokesman of the Immigration and Emigration Department, told Reuters. He said Mahendran's passport had not been impounded, but he had been barred from foreign travel to facilitate the Commission's investigation. Mahendran, a Sri Lankan-born Singapore national, was questioned on Thursday by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), media reported. Mahendran, as well as officials of the anti-graft body, declined to comment on the investigation. The central bank governor took a voluntary leave of absence from March 16 pending the outcome. At the February bond auction, the government raised more than 10 billion rupees from a 30-year treasury bond at 11.73 percent after initially offering just 1 billion rupees with an indicative price of 9.5 percent. Soon after the auction, primary dealers raised concerns over possible insider dealing, as one particular dealing house had been favoured and the yield spiked more than 2 percent from the indicative price of 9.5 percent. Besides the Mahendran investigation, Wickremesinghe also launched an inquiry into allegations of corruption in government bond sales by the central bank since 2012. (Reporting by Shihar Aneez; Editing by Clarence Fernandez)