… lead on Rs 13.2 bn NDB fraud

A sprawling fraud, involving the transfer of millions of dollars overseas under the guise of payments for non-existent imports, has been uncovered by law enforcement and customs authorities, Public Security Minister Ananda Wijepala told Parliament yesterday.

The Minister said investigations by the Central Crimes Investigation Bureau (CCIB), the Financial Crimes Investigation Division (FCID) and Sri Lanka Customs had revealed that large-scale foreign exchange transfers were being routed abroad through telegraphic transfer (TT) systems for goods that were never imported, contributing to significant dollar outflows from the country.

Wijepala said investigators were now working to identify political figures, state officials and banking sector employees, allegedly linked to the racket, adding that preliminary findings indicated the involvement of individuals across multiple institutional levels.

He told the House that provisions under the Prevention of Money Laundering Act, No. 5 of 2006 had earlier classified foreign exchange offences as predicate offences for money laundering,

but amendments under the Foreign Exchange Act, No. 12 of 2017 had removed such provisions, creating loopholes that were subsequently exploited for illicit capital flight. The government, he said, had now moved to amend the relevant legal framework.

The Minister outlined a series of parallel investigations that, he said, pointed to interconnected money laundering and narcotics-linked financial networks operating through shell companies and bank accounts.

In one major breakthrough, the Kelaniya Crime Division police conducting a random search in Peliyagoda discovered Rs. 30 million hidden in a three-wheeler. Two suspects were arrested and, following further interrogations, six more persons were taken into custody. Acting on initial suspicions of narcotics proceeds, the Inspector General of Police referred the case to the CCIB.

Subsequent investigations revealed that the cash had been intended for deposit into accounts linked to Next Gen (Pvt.) Ltd. The company was found to have transferred approximately Rs. 12,890 million abroad in 953 transactions to 256 companies across 26 countries, purportedly for imports that never materialised. The total outflow was estimated at USD 42.7 million.

Investigators further found that the company was controlled by a single director and shareholder and had no verifiable business activity. Authorities also established that funds linked to a recent Rs. 13 billion fraud, at NDB, had been routed into the same accounts.

Police have since frozen two accounts held at the People’s Bank’s Kolonnawa branch and Sampath Bank’s Wellampitiya branch.

In a separate incident, Negombo police arrested four suspects, on 15 February, 2026, in possession of heroin. Interrogations reportedly revealed that proceeds from narcotics sales were being channelled into a bank account, opened at a Divulapitiya branch of a Commercial Bank, allegedly linked to a Sri Lankan national, operating from Dubai.

According to investigators, the network involved deposits from drug dealers into the Divulapitiya account, with funds subsequently transferred to a Commercial Bank, Pettah branch account, belonging to AY Investments. The account reportedly held Rs. 2.2 billion after being opened on 09 September, 2024.

Authorities said withdrawals were made via cheques every two to three days and re-deposited into another AY Investments account at Union Bank’s Pettah branch. The company maintained four accounts at the branch, collectively holding around Rs. 13 billion.

Between 03 October, 2025, and 04 March, 2026, investigators said approximately USD 43 million had been transferred abroad from these accounts under the pretext of importing hardware, bathroom fittings and gold jewellery, none of which were brought into the country. A further Rs. 53.6 million balance has since been frozen as suspected proceeds of crime.

Investigators have also uncovered a wider pattern in which company directors allegedly establish import-export entities, operate them for short periods of around six months, and then dissolve or replace them with new entities. Customs officials have reportedly identified 105 local companies operating through 227 accounts in 13 banks, with funds transferred abroad in 26,108 instances between 01 January, 2023, and 30 September, 2025, for non-imported goods.

The racket is believed to involve 55 company directors and secretaries who allegedly function as facilitators in setting up and rotating such entities.

Officials noted that under existing procedures, banks are required to inform Sri Lanka Customs and the Central Bank within 180 days of TT transactions related to imports. Where goods are not received, Customs is expected to notify the Import and Export Controller and the Central Bank. However, investigators said these reporting mechanisms had not been properly followed, enabling systemic abuse.

Following the exposure of the racket, President Anura Kumara Dissanayake has summoned heads of relevant institutions for two high-level meetings, directing immediate action and comprehensive investigations.

Minister Wijepala said further inquiries were ongoing and assured that strict legal action would be taken against all perpetrators regardless of rank or position in the coming days.

By Saman Indrajith

Colombo High Court Judge Mohamed Mihal yesterday (09) found former Deputy Minister Sarana Gunawardena (UPFA) guilty on four counts of corruption charges and was sentenced to four years of rigorous imprisonment for each count. Accordingly, the court ordered a total sentence of 16 years of rigorous imprisonment.

In addition, the court imposed a fine of Rs. 1.8 mn on the ex-MP in respect of the four cases.

The indictments were filed by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) under Section 70 of the Bribery Act of 1954, alleging the offence of corruption.

The prosecution alleged that, while serving as Chairman of the Development Lotteries Board in 2006, Gunawardena caused a loss to the State by procuring vehicles for the institution on a rental basis. Based on these allegations, CIABOC filed the four cases against him in 2022.

Opposition and SJB Leader Sajith Premadasa yesterday (09) called on the Government to immediately table in Parliament the Treasury report on the alleged USD 2.5 million financial loss.

Addressing the House, Premadasa said contradictory positions taken by the Central Bank and the Treasury had triggered what he described as a serious crisis in economic policy coherence, undermining the consistency required for effective fiscal and monetary management.

He warned that such divergences in official positions were weakening confidence at a time when both fiscal and monetary frameworks required clarity, coordination and predictability.

The Opposition Leader also urged the government to present a comprehensive policy framework on fiscal and monetary management, including the instruments in use, their respective targets, and the institutions tasked with implementation.

Premadasa further called for disclosure of the extent to which agreements with multilateral lenders and development partners, including the International Monetary Fund (IMF), World Bank and Asian Development Bank, have influenced domestic policy decisions, particularly in relation to primary balance and revenue targets.

Drawing attention to the cost-of-living burden, he questioned the Government’s claim that Rs. 17,000 was sufficient for an individual to meet monthly living expenses, asking whether such an amount could realistically cover both food and non-food requirements.

He also sought details of measures taken to alleviate economic pressure on the middle class, professionals, small and medium enterprises, farmers, fishermen and low-income groups, who, he said, continue to be affected by high taxation, expenditure constraints and elevated interest rates.

Premadasa stressed the need to strengthen parliamentary oversight and enhance public accountability in the formulation and implementation of fiscal and monetary policy.

by Saman Indrajith