Four private bank officials held over an alleged scheme to move more than US$1 billion out of Sri Lanka have been further remanded until September 3, after the Colombo Chief Magistrate’s Court again refused them bail on Thursday.
Chief Magistrate Asanga S. Bodaragama made the order after hearing submissions from the Police Financial Crimes Investigation Division (FCID) and lawyers for the suspects. Ada Derana reported that a businessman held in the same case was also further remanded; Daily Mirror and NewsFirst reported the order in terms of the four bank officials.
Court turns attention to senior management
The most significant development came in a direction from the bench. The Daily Mirror reported that the magistrate ordered the FCID to investigate whether senior officials at the banks concerned had aided and abetted the alleged offences, and whether they had taken part by disregarding their institutions’ own legal frameworks and procedures.
The court further directed investigators to establish whether any senior bank officials had exerted criminal influence in connection with the transactions, and to report back on a future date.
That widens an inquiry that has so far centred on branch-level staff. The four were arrested at their branches on August 17 — the first time bank employees have been detained that way in Sri Lanka — and were remanded until Thursday’s hearing.
The allegations
Investigators allege the money was remitted abroad on false declarations that it was payment for imported goods that never arrived. The case began with businessman Jeffrey Mohamed, accused of setting up about 36 bogus companies as a front for the transfers.
NewsFirst reported the per-suspect figures placed before court: a branch manager linked to roughly US$5.5 million; a sales promotions manager who made 25 telegraphic transfers worth US$647,207; an executive officer who processed 1,067 electronic transfers totalling about US$24.6 million; and another who moved some US$32 million across 943 transactions.
Police said customs paperwork and supporting records were forged, that the officials acted in breach of Central Bank rules, and that they appear to have been paid for their assistance. Investigators also allege the suspects trained others in preparing the false documents.
The case sits within a wider crackdown on informal and fraudulent outward transfers, which last week saw the Cabinet approve making unauthorised transfers a criminal offence rather than a matter for Central Bank fines alone.
