The scheme that moved hundreds of millions of dollars out of Sri Lanka against imports that never arrived defeated its main safeguard by the simplest possible means: bank staff typed a single full stop into the field meant to hold a mandatory reference number.
That detail comes from an account of parliamentary committee proceedings published by The Morning on Sunday, which sets out the systemic failures behind an investigation that has so far produced four arrested bank officials and a businessman, all remanded until September 3.
The dot that defeated the safeguard
Every dollar sent abroad for an import is supposed to be reconciled against goods actually received, through a Unique Reference Number. The Committee on Public Finance (COPF), at a sitting on 21 July chaired by Dr. Harsha de Silva, was told that commercial banks — acting as delegated authorities — entered a single full stop into mandatory URN fields to force payments through without a valid reference code.
Questioned on the point, R.R.S. De Silva Jayatillake of the Central Bank’s Supervision Department said its oversight operated on a macro-prudential basis, focused on capital and liquidity rather than individual transactions.
Warnings issued five years ago
The Financial Intelligence Unit told the committee it had flagged the risk long before the fraud surfaced. Its Director said red flags over trade-based money laundering were issued to banks as early as 2021, with letters sent that year to the President’s Secretary, the Treasury and the Central Bank Governor warning specifically about siphoning through advance payments.
Those warnings, the FIU said, were largely unheeded.
Where the 105 companies came from
Sri Lanka Customs reported to the Inspector General of Police in three tranches — on 20 January, 23 February and 6 March 2026 — naming 89, four and 12 companies respectively. Those figures sum exactly to the 105 companies now central to the case, which Customs said remitted approximately Rs. 214.7 billion abroad with no corresponding goods imported.
Investigators later established that just 55 individuals served as directors or company secretaries across all 105, moving funds through 227 bank accounts and roughly 24,300 telegraphic transfers between January 2023 and March 2026, spanning 13 major public and private banks. One suspect, presenting himself as owner of 43 of the companies, allegedly remitted around US$43 million alone.
The headline figure needs care. The “US$1 billion” cited since President Anura Kumara Dissanayake’s June statement refers to total suspected siphoning since 2023; the Customs-referred set of 105 companies was put at nearly US$715 million by the Sunday Times on 9 August, which is consistent with Rs. 214.7 billion at current rates.
Other channels, and a deadline
The committee also heard that the Registrar of Companies remains on manual processes that take two to three days to handle a single document upload, ruling out real-time verification, and that dummy directors — “directors who do not own shops or even work as three-wheeler drivers”, in the words of SDIG Asanka Karawita — routinely fronted shell entities. Small-parcel courier shipments were identified as a further gap.
The COPF directed the Deputy Secretary to the Treasury to establish a joint task force of the Treasury, Customs, Police, Central Bank and FIU, with two months to report back on reforms. Separately, Cabinet has moved to make unauthorised transfers a criminal offence rather than a matter for Central Bank fines.
The Morning also reported an estimate given at the sitting that US$40–50 billion in export proceeds remains outside the country — a figure far larger than either case before the courts, and one no other outlet has independently confirmed.
