Tax haven Lankan accounts open can of worms in P’ment; UNP wants Select Committee probe

Thursday, 20 June 2013 01:03 - - {{hitsCtrl.values.hits}}

By Ashwin Hemmathagama Our Lobby Correspondent Leaked information on several alleged secret accounts of Sri Lankans in tax havens was in the spotlight yesterday in Parliament, with the UNP calling for a Select Committee probe. “I request the constitution of a Parliamentary Select Committee to look into this matter since these revelations are not limited to this country but in multiple countries around the globe,” UNP MP Dr. Harsha de Silva said in reflection of a statement of the party during the adjournment debate on the Annual Report 2012 of the Central Bank of Sri Lanka In asking Speaker Chamal Rajapaksa to constitute a Select Committee, Dr. de Silva said the latter should conduct investigations into the recent inquiries conducted by the regulators – the Securities Exchange Commission (SEC) and the Central Bank – on market manipulations. “Some time back, I criticised a stock market manipulator known as ERI (Environment Resources Investments). The very next day the Director of that company attacked me by saying that people like me should immediately be eliminated for the simple reason of not allowing Sri Lanka become the financial hub of South Asia. Unfortunately, the International Consortium of Investigative Journalism has released a number of names yesterday. Included in this list of names are those who are connected to the ERI and Saint Capital Trust. “I tabled a document which mapped out one Thushan Wickramasinghe, connected to a company called Lion Heart. I will tell you the reasons why it is important and what was found out about the shell companies which operated in the tax havens including the British Virgin Islands and Gibraltar. This is a maze of secret accounts. This rouge company ERI is perhaps the biggest manipulator of share prices from Rs. 10 to Rs. 260 based on rumours which were fed to poor investors. People lost millions based on the wrong assumption that this company owned a platinum mine and the dividends of that platinum mine would come and the share price would increase. But what happened was a pump and dump. Ultimately it was found that it was an absolute falsification of facts. The SEC never went for a conviction but simply charged each Director of the company a puny amount of Rs. 3.3 million for falsification and non-disclosure although they have misappropriated hundreds of million dollars. “The funny thing is that CBSL gave approval to take this money out. The Exchange Control Act is within the scope of the CBSL. Why didn’t the CBSL look at this transaction more carefully? Actually at the time period CBSL was involved in organising the Commonwealth Games in Hambantota, the same bid we lost. This particular company was the largest private sector investor, supposedly the investor who was going to build the Commonwealth Games Village. So there is some intricate relationship between these companies, CBSL and SEC. We have lost faith in any investigations conducted by CBSL or SEC,” added Dr. de Silva.