Roadblock in Central Bank Scandal Probe. Singapore Denies Extradition of Arjun Mahendran

The Singaporean authorities have cited legal constraints as the reason for their inability to extradite former Central Bank Governor Arjun Mahendran to Sri Lanka, presenting a fresh challenge for the Sri Lankan government in its efforts to investigate the 2015 bond scam that resulted in a loss of Rs. 10 billion.
The Sri Lankan Attorney General’s Department had formally sought the extradition of Mr. Mahendran, who has been implicated in the controversial bond fraud that took place under the Yahapalana government. A Singaporean national of Sri Lankan origin, Mr. Mahendran was serving as the Central Bank Governor at the time of the incident.
Last year, the Colombo Magistrate’s Court ordered him to appear before the court on February 25, 2025, in response to a case filed by the Bribery Commission. Additionally, the Colombo Permanent Trial-at-Bar bench has issued an Interpol warrant for his arrest in connection with the scandal.
The case revolves around the misappropriation of bonds, which led to massive financial losses for the Sri Lankan government. The scam, which occurred on February 27, 2015, involved the issuance of government bonds under Mr. Mahendran’s leadership at the Central Bank. Perpetual Treasuries Limited, a primary dealer in the bond market owned by Mahendran’s son-in-law Arjun Aloysius, was identified as a major beneficiary of the bond issuance.
During his campaign, President Anura Kumara Dissanayake pledged to bring Mr. Mahendran back to Sri Lanka and made it a priority for his administration. Following the presidential election, Foreign Affairs Minister Vijitha Herath, then acting as Cabinet spokesman, announced that the Public Security Ministry had launched legal investigations into the bond fraud, considering findings from the Presidential Commission of Inquiry and the Parliamentary Select Committee.
A top legal source confirmed that Singaporean authorities had informed their Sri Lankan counterparts that Mr. Mahendran could not be extradited under Singaporean law. However, both Sri Lanka and Singapore, as Commonwealth nations, have extradition provisions under Commonwealth Schemes, raising further legal questions on the matter.
This development presents a significant roadblock for Sri Lanka in its ongoing efforts to bring justice to those involved in the massive financial scandal. The Sri Lankan government is expected to explore diplomatic and legal avenues to address the issue and seek alternative measures for holding those responsible accountable.