Colombo High Court Judge Buddhika C. Ragala has enlarged businessman Jiffry Mohamed on bail in a money laundering case in which the alleged underlying crime is drug trafficking — an allegation a magistrate discharged him from last month, Daily FT reported on Thursday.
The order followed submissions for the accused and for the State. He was released on cash bail of Rs. 25,000 with two sureties of Rs. 1 million each on 8 October.
Counsel Priyantha Nawana PC, appearing with Shafi Hussain and Dinali Siva, instructed by Asanka Perera, submitted that the matter was coming for order following bail submissions made on the previous date by senior counsel M. M. Zuhair PC. Nawana argued the Court has power to grant bail under section 17 of the Prevention of Money Laundering Act read with the Bail Act, and that the accused has no previous conviction for any offence.
The State said investigations were ongoing; the court said the indictment closed them
State Counsel Oswald Perera, objecting to bail, submitted that investigations into the accused are continuing and that releasing him at this stage could affect them.
The Court held that the indictment had been filed on the basis that investigations in the case were concluded, and made order enlarging him on cash bail with two sureties.
The predicate offence he was discharged from
The indictment alleges offences under the Prevention of Money Laundering Act, with the “unlawful activity” relied on being offences including “trafficking in drugs” in violation of the Poisons, Opium and Dangerous Drugs Act.
That is the same allegation a magistrate dismissed a month earlier. Following a further report from the Negombo Headquarters Police stating that no new material had been disclosed against him, the Negombo Magistrate on 15 September discharged Jiffry Mohamed from further proceedings in the alleged drug case.
Daily FT’s earlier report on that discharge sets out the magistrate’s reasoning in more detail. Negombo Magistrate Shilanee Perera held that no offence under section 54(a) of the Poisons, Opium and Dangerous Drugs Act had been disclosed in the reports before Court, and that no other criminal offence had been alleged against him in those proceedings.
He had been produced as the fourth suspect, on allegations of receiving deposits of money from the bank account of the first suspect, named as Fernando, who had previously been arrested for alleged possession of heroin. Fernando was enlarged on bail by the Negombo High Court.
Written submissions filed in the connected Negombo case stated there was no evidence or allegation before the Court that the accused had trafficked or possessed any quantity of any drug at any time.
What the defence says the money was
Jiffry Mohamed is described as a director of A Y Investments Impex Ltd of ‘Supernova Complex’, Bankshall Street, Colombo.
His counsel’s account of the business is specific. He is a businessman of repute with no previous convictions or involvement with police or courts. His business accounts are open for deposits, into which he regularly receives advance payments from multiple importers for the import of goods. He is a service provider: he deposits the rupee payments he receives in banks, and it is then the bank that converts the rupees into foreign currency and transfers the money to the foreign exporters supplying goods to Sri Lanka — a lawful process, counsel submitted, under Import and Export Control Act Regulation No. 1 of 2011. He is a trusted businessman handling a large volume of advance payments in rupees for importers, and is not himself an importer.
Counsel said that according to police, he received over Rs. 74 billion into his rupee accounts during 2024 and 2025. He is not aware of Fernando, counsel submitted, and has no knowledge of any deposits by the first suspect or the history of such deposits, nor any knowledge of or records relating to drugs.
Citing Sriyalatha Saraswathie v Attorney General, Zuhair submitted that “the criminal liability attaches only to possession which is to be proved to be ‘actual’, ‘exclusive’ and ‘conscious possession’ on the part of a person.”
Two figures for the scale of the case
Neither of Thursday’s filings states the total sum alleged to have been laundered.
A Sunday Times report of 20 September — noted here for the record rather than cited as a source for this article, as it falls outside this desk’s source-dating window — identified the main suspect in what it called the dollar-transfer case as Jiffry Mohamed of AY Investments Impex Pvt Ltd, and put the allegation at the transfer of more than US$700 million to overseas accounts under the guise of importing goods. It reported him as then in remand custody, having earlier been produced before Colombo Chief Magistrate Asanga S. Bodaragama and remanded.
The two figures in circulation measure different things over different periods and should not be read as alternative versions of one number: the Rs. 74 billion is money police say was received into rupee accounts across 2024 and 2025, while the US$700 million-plus is money alleged to have been transferred abroad. No filing reconciles them, and no outlet has published the conversion basis, the period covered by the larger figure, or how much of either sum is said to be unlawful in origin.
Not reported
The next date in the High Court case is not given, nor the number of counts in the indictment, the identity of any co-accused in the High Court matter, or which agency investigated it. It is not reported whether the State intends to appeal the bail order, or whether the Attorney General’s Department has taken any position on the effect of the September discharge on the money laundering indictment — the central legal question the two filings raise together but neither addresses.
Whether the “investigations” State Counsel described as ongoing concern the same transactions covered by the indictment, or a separate matter, is not stated. The 8 October release date appears in Thursday’s filing without explanation of the interval before publication, and the date on which Judge Ragala delivered the order is not separately given.
Both sources for this article are from Daily FT, which counts once toward this article’s source rating. After a search of the verified newsrooms, no other had filed on the bail order at the time of writing.
