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FSP traces current forex crisis to PM doing away with Exchange Control Act under yahapalana rule

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By Saman Indrajiith

The Frontline Socialist Party, on Tuesday, said that amending of laws in favour of forex racketeers by the Yahapalana government in 2017 was one of the main causes of the prevailing forex shortage crisis.

Addressing the media at the party head office in Nugegoda, FSP Education Secretary, Pubudu Jagoda, said that the then Prime Minister Wickremesinghe had got the Exchange Control Act amended. “Since 1953, we have had the Exchange Control Act which prevented questionable outflows of forex. Wickremesinghe brought in a new law under the name Foreign Exchange Act, in 2017, replacing the former legislation. He said the reason for doing away with the Exchange Control Act of 1953 was to liberalise the foreign exchange flow. However, the new law proved detrimental to this country’s interests. Around 30 forex fraudsters were released from the cases against them. The new law has led to the present foreign exchange crisis.

“As per the previous legislation, exporters required to bring home an equivalent, or more, of foreign exchange of the worth of their exports via the banking system. The violation of the law was a criminal offence. The offences, under the former legislation, were non bailable offences. As per the provisions of the Exchange Control Act, the property of the offender was to be confiscated. At the time the new law was introduced, there were around 30 cases pending before our courts against alleged violators of the former Act. Among those were close associates of Wickremesinghe and some members of the Rajapaksa family.

“It is usual when a new Act is introduced, replacing the former Act, mention has to be made with regard to the procedure to be adapted for the cases pending before the courts for offences committed under the previous Act. The new Foreign Exchange Act, introduced by Wickremesinghe, converted the criminal offence into a civil offence. It relegated the forex offences under the new act to the jurisdiction to Magistrates’ Courts from High Courts and also provided for bail to be granted by a Magistrate. With regard to the mandatory confiscation of property and earnings of forex crimes, the new Act placed it under the discretion of the judge. As per the provisions of the new Act, those pending cases came to an end. The provisions of the new Act called for a fresh filing of the cases within a period of three months. There were no cases filed for the same offences and all those who had been charged under the former Act were allowed to get away.

The new Act, which came into force in 2017, was favourable to forex racketeers and enabled many unscrupulous exports to park their dollars overseas, contributing to the present crisis.



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Chemmani mass graves: Govt to seek international forensic help

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ECONOMYNEXT –International assistance for forensic analysis of the remains unearthed at the Chemmani mass grave will be sought when the need arises, Sri Lanka’s Minister of has Justice said after opposition legislators urged the government to seek help.

“We have spoken to embassies, we have made all the local finances necessary for excavation. But when it comes to DNA analysis, depending on the type and nature we will definitely have to go for internationally recognised places,” Harshana Nanayakkara said in response to a query in Parliament.

Nanayakkara said that request for international expertise is dependant on the direction the courts give on what needs to be done, after which they will decide which agency best suits the proceedings.

The minister also recognised that local expertise is lacking in the forensic department, and the need to train local staff with the help of international experts.

Opposition MPs argued that the present need is direct help in forensics from international entities, rather than the longer term need to train the staff on analysis.

Currently, the investigation is in the excavation and exhumation stage, conducted by archaeologist Raj Somadeva and his team.

The existence of the Chemmani mass grave was first brought to light in 1998, during the trial of the rape and murder of schoolgirl Krishanti Kumaraswamy.

In February 2025, construction workers found remains near the Sinthupathy Cemetery, and following investigations ordered by the Learned Magistrate, the mass grave was discovered.

412 bodies have been discovered, with 409 bodies recovered as of 23 June 2026. According to the Office on Missing Persons, this is the 17th recorded mass grave in Sri Lanka.

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ADB approves $57.4 million package to boost Lanka’s rooftop solar drive

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The Asian Development Bank (ADB) has approved a $57.4 million financing package to help Sri Lanka expand access to affordable clean energy and reduce greenhouse gas emissions through a large-scale rooftop solar aggregation and virtual net metering programme.

The financing comprises a $35 million concessional loan, $16.9 million in grants from the European Union and $5.5 million from the Japan Fund for the Joint Crediting Mechanism. With additional contributions from implementing agencies, the total estimated cost of the project is $80.5 million.

Under the Rooftop Solar Aggregation and Virtual Net Metering Project, two state-owned utilities — Electricity Distribution Lanka (Private) Limited and Lanka Electricity Company (Private) Limited — will introduce a scalable model to collect electricity generated from large rooftop solar installations and allocate the benefits virtually among eligible consumers.

The initiative will allow consumers to access solar power benefits without having to install individual rooftop solar systems.

ADB Country Director for Sri Lanka Shannon Cowlin said the project would broaden access to affordable renewable energy while strengthening the resilience and inclusiveness of the country’s power sector.

She said the initiative would also support grid modernisation and digital transformation, while creating employment opportunities and encouraging greater participation of women and youth in the clean energy sector.

The project is expected to benefit micro, small and medium enterprises and community organisations that face financial or space constraints in installing their own rooftop solar systems. Through a social compensation mechanism, eligible groups will receive reductions in electricity costs under the virtual net metering system.

The programme will support around 25 megawatt-peak of rooftop solar capacity while strengthening distribution networks, improving digital capabilities and preparing the national grid to accommodate higher levels of distributed renewable energy.

A dedicated training facility will also be established under the project to develop green skills, enhance women’s participation in the sector and build technical expertise in advanced low-carbon technologies.

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Bond scam case against Mahendran, Ravi K fixed for July 22

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The Colombo High Court on Friday ordered that proceedings in the case filed against 11 defendants, including former Central Bank Governor Arjuna Mahendran and former Finance Minister Ravi Karunanayake, over alleged irregularities in the Central Bank bond auction be taken up again on July 22.

The case was called before Colombo High Court Judge Manjula Thilakaratne, who informed court that the Trial-at-Bar bench appointed to hear the matter had not been properly constituted.

Accordingly, the judge directed that the case be recalled on July 22 for further proceedings.

The Attorney General has filed indictments under the Public Property Act against 11 accused, including Mahendran, Karunanayake, Perpetual Treasuries Limited and its directors Arjun Aloysius and Geoffrey Aloysius.

The accused have been charged over alleged irregularities connected to a Treasury bond auction conducted by the Central Bank in March 2016.

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