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UK tycoon linked to probe by Sri Lanka
07 Oct, 2015
A UK based tycoon has been linked to investigations being conducted over billions of dollars allegedly stolen from Sri Lanka by associates of former President Mahinda Rajapaksa, BuzzFeed News reported.
An investigation conducted by BuzzFeed News said that the offshore empire of the Lycamobile tycoon Subaskaran Allirajah is facing investigation as part of a sprawling international probe into allegations that billions of dollars were stolen from Sri Lanka by associates of the country?s former president Mahinda Rajapaksa.
BuzzFeed News has uncovered secret details of a deal being scrutinised by the Sri Lankan authorities in which the state telecoms company was effectively forced to pump around $10 million into a ?completely flawed? venture owned jointly by a relative of Rajapaksa and a key offshore company in the Lycamobile business network.
Senior government and police officials in Colombo, Sri Lanka, told BuzzFeed News that the newly inaugurated financial crimes division of the Sri Lankan police is launching a probe into the venture, Sky Network, which they suspect was a ?shell company? that the president?s nephew used to enrich himself through a ?shady transaction?.
Allirajah has strongly denied allegations about his association with the autocrat, who is accused of rampant corruption and human rights atrocities during his decade in power. He insisted last year that he had no business in Sri Lanka and had never met Rajapaksa or dealt with his relatives. But now BuzzFeed News has obtained conclusive evidence ? from corporate documents, insiders, and government officials ? that his empire did business with the Rajapaksa family. Company filings in Colombo show that Sky Network was 95% owned by a key arm of Lycamobile?s corporate web and the former president?s nephew, who sat on the board alongside the telecoms giant?s then chief executive.
The revelations will pile further pressure on David Cameron to sever his ties with Allirajah, whose company has donated more than ?1.3 million to the Tories. The party has previously brushed off explicit warnings about the donor?s links to the Rakapaksa family and continued accepting gifts running to more than ?500,000 in this year alone.
The prime minister is already facing calls to hand back the money after BuzzFeed News yesterday revealed secret footage of three Lyca bagmen depositing rucksacks stuffed with hundreds of thousands of pounds in cash at Post Offices all over London. The company said it was a cash-rich business and that the deposits were just above-board ?day to day banking? but experts including the former director of public prosecutions Lord MacDonald said they were ?deeply suspicious? and called for an urgent investigation.
There is no evidence to suggest that the corruption claims in Colombo are connected to the company?s unusual cash deposits in London, but they raise further serious questions about the way the Lyca group conducts its business. The firm, which declared ?1.1 billion in global turnover last year and is rapidly expanding in the United States, has avoided UK corporation tax for years by moving revenues out of the country through a complex offshore network. Some of that money ends up in Hastings Trading e Servi?os Lda ? the Madeira company that acquired 95% of Sky Network, with the president?s nephew retaining the other 5%.
BuzzFeed News interviewed two former executives at Sri Lanka Telecom (SLT) who said the majority state-owned firm was all but forced to pour millions of dollars into Sky Network and got nothing in return. A senior detective in the Sri Lankan police force said it had ?started the legal process of investigation? into the deal, and the country?s deputy foreign minister confirmed that the new probe was part of the wider international hunt for assets allegedly stolen during Rajapaksa?s decade of kleptocracy.
Speaking animatedly about a container of gold he believed Rajapaksa?s family had hidden under the sea, cabinet spokesman Rajitha Senaratne sat in an office that epitomised the challenge of a developing nation trying to find and retrieve precious assets now dispersed around the world. Cream-coloured paint peeled off the walls of the government building. There was no air conditioning, only fans which needed restarting every so often. A torn sign Sellotaped to the unmanned reception desk warned: ?Please do not put weight on?? The car park was riddled with potholes full of monsoon rain.
Searching for Sri Lanka?s embezzled billions is a daunting task for the new regime, which came to power when Rajapaksa was finally ousted by voters in January this year, especially because it presides over a country still emerging from decades of civil war. Senaratne told BuzzFeed News that investigators believe the Rajapaksa family has gone to extraordinary lengths to hide stolen assets from the state. ?They took about 11 containers of cash and gold from the presidential palace,? he said. ?We understand they have sealed the containers and taken some underground, and they have dropped one in the sea ? we do not know the exact site but we know the area.?
In total, the new government estimates the former president and his cronies have hidden at least $10 billion through a web of offshore accounts, various associates, and business ventures around the world. They believe $5.31 billion was taken out of Sri Lanka in 2013 alone. And they are determined to find the money and bring it home.
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