Singapore Declines Extradition of Arjuna Mahendran, Posing Challenge for Sri Lanka's Bond Scam Probe

Singaporean authorities have cited legal constraints preventing the extradition of former Central Bank Governor Arjuna Mahendran to Sri Lanka, complicating the government’s efforts to prosecute those involved in the 2015 Central Bank bond scam, which resulted in a Rs. 10 billion loss.

The Sri Lankan Attorney General’s Department had requested Mahendran’s extradition due to his alleged involvement in the bond fraud under the Yahapalana government. Despite being a Sri Lankan-origin Singaporean citizen, extradition laws in Singapore have become a hurdle in bringing him back.

The Colombo Magistrate’s Court had summoned Mahendran to appear on February 25, 2025, in a case filed by the Bribery Commission. Additionally, the Colombo Permanent Trial-at-Bar bench has issued an Interpol warrant for his arrest.

President Anura Kumara Dissanayake, during his election campaign, pledged to prioritize Mahendran’s extradition. Following the election, Foreign Minister Vijitha Herath announced that the Public Security Ministry had launched legal investigations based on findings from the Presidential Commission of Inquiry and the Parliamentary Select Committee.

The Central Bank bond scam, which took place on February 27, 2015, involved the issuance of government bonds under Mahendran’s leadership. Perpetual Treasuries Limited, owned by his son-in-law Arjun Aloysius, was the primary beneficiary of the controversial bond issuance.

Although both Sri Lanka and Singapore are Commonwealth nations, enabling extradition agreements under Commonwealth schemes, legal complexities have hindered Mahendran’s return. This latest development raises concerns about Sri Lanka’s ability to prosecute financial fraud cases involving foreign jurisdictions.