In his native Sri Lanka, convicted Rajaratnam is no household name

By C. Bryson Hull and Shihar Aneez

Reuters: Even in the heart of Sri Lanka’s financial capital, convicted hedge fund founder and one-time billionaire Raj Rajaratnam remains a mystery to many on the island of his birth.

Found guilty of 14 counts of conspiracy and securities fraud on Wednesday in New York in one of the United States’ largest hedge fund insider trading cases, Rajaratnam’s fate and infamy in his adopted country has drawn negligible attention in Sri Lanka.

“Who is that? I really don’t know,” said a man who identified himself only as Fernando, when asked what he thought about Rajaratnam inside Colombo’s World Trade Centre, the Indian Ocean island nation’s financial hub.

Out of 22 people a Reuters correspondent spoke to, 10 of whom work in the financial markets, only three knew who Rajaratnam was. Others just gave bemused expressions when asked about the money manager, an American citizen who has lived in the United States for three decades.

“I don’t think there will be any problem in the market here, and nobody cares,” Jaliya Wijeratne, Director of Corporate Sales and Foreign Investment at New World Securities, told Reuters.

During the two-month trial, while his case made headlines on business pages throughout the world, Sri Lankan newspapers rarely carried stories about a man who was once billed as the richest Sri Lankan. Much more ink was spent on newfound peace.

It was only after Wednesday’s verdict that Rajaratnam, 53, made the front pages in Sri Lanka, a country he left during bubbling ethnic turmoil in the mid-1970s that erupted into a full-blown civil war that only ended two years ago.

The man in New York who has drawn far more Sri Lankan press of late than Rajaratnam is U.N. Secretary-General Ban Ki-moon.

Ban last month published an advisory panel’s report that concluded there was “credible evidence” Sri Lankan forces committed war crimes and killed thousands of civilians at the 2009 end of a 25-year war with the Tamil Tiger separatists.

Rajaratnam, a member of Sri Lanka’s minority Tamil population, was raised in the privileged environs of Colombo’s Cinnamon Gardens and the clubby atmosphere of private school ties that closely bind Colombo’s elite even today.

His only visit to Sri Lanka after emigrating came after the Boxing Day 2004 tsunami that killed 30,000 in Sri Lanka, when he set up a charity to help rebuilding.

Though he had been a big investor in the small Colombo Stock Exchange, Rajaratnam pulled out all of his investments last year.

“He had liquidated a year ago. He is not a player anymore,” Murtaza Jafferjee, Chairman and Managing Director of JB Stockbrokers in Colombo and a Rajaratnam schoolmate, told Reuters.

“It is always sad to see a fellow Sri Lankan going so down badly. Personally, I feel very sad for him and his family,” said Jafferjee, whose company handled some Rajaratnam investments.

Sri Lanka’s Securities and Exchange Commission declined to comment on the verdict.

When he was arrested in October 2009, President Mahinda Rajapaksa’s Government said it was investigating whether he had any link with the Tamil Tigers, who had been wiped out by the military in May that year.

The Government never presented any evidence publicly and two US officials involved with the Sri Lankan Government said they had asked for leads but were never given any.

“I can tell you if he had such a close link, the US would have been the first country that would have found him,” said a longtime Rajaratnam friend, who spoke on condition of anonymity because he holds a senior corporate job in Sri Lanka.

“If it was a question of him funding terrorism, long ago they would have gone after him – forget about insider trading,” the friend said. “So you can’t mix the two.”