The Central Bank of Sri Lanka on Friday formally rejected claims by a director of Kasagala Green Plantation (Pvt) Ltd. that the company was regulated by the regulator, and on the same day issued a separate directive warning media institutions they face liability for advertisements that promote unauthorised deposit-taking businesses, Newswire reported.

In a statement issued on June 12, the Central Bank said it had been informed that Malwattage Ranjith Nandana Pieris, a director of Kasagala Green Plantation, had told the “Pini Viyana” programme aired on ITN on June 8 that the company was regulated by the Central Bank, submitted information to the regulator every six months, and would be subject to inquiries by the Central Bank if concerns arose. The Central Bank “formally and categorically denied” the claims, calling the information “factually incorrect, misleading, and without legal basis” and warning the statements “could potentially cause serious harm” to members of the public who saw them on television and social media.

The regulator confirmed it is investigating Kasagala Green Plantation under the Finance Business Act No. 42 of 2011, specifically under Section 2 of the Act, to determine whether the company has carried on finance business or accepted deposits from the public in contravention of the law, EconomyNext reported. The Central Bank urged the public to be aware of the ongoing investigation and reiterated that the company’s claim of being regulated by the Central Bank is not valid.

In a parallel letter dated June 12 addressed to chairpersons of all media institutions, the Central Bank’s Department of Supervision of Non-Bank Financial Institutions said it has become increasingly difficult to prevent members of the public from falling victim to unauthorised deposit-taking schemes. Despite ongoing awareness campaigns, the letter said, unauthorised entities continue to use media platforms to promote businesses that display features of “deposits” as defined under the Finance Business Act. Under Sections 49 and 56(4) of the Act, media houses are required to verify with advertisers whether they are authorised to accept deposits before publishing solicitation advertisements, and failure to do so is an offence under the same law.

The Friday actions extend the Central Bank’s public “be scam-proof” investor-protection campaign launched earlier this month and connect for the first time the broadcast-media route — through which Kasagala Green Plantation’s televised claim reached the public — to the regulator’s enforcement toolkit. The Central Bank has not named the broadcaster carrying the original ITN segment as an enforcement target in Friday’s statement.

Sources