A UK based tycoon has been linked to investigations being conducted over billions of dollars allegedly stolen from Sri Lanka by associates of the previous regime, 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 former government was effectively forced to pump around $10 million into a “completely flawed” venture owned jointly by a person linked to a powerful political family 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 relative of the famous political family used to enrich himself through a “shady transaction”.
Allirajah has strongly denied allegations about his association with the previous regime of Sri Lanka. He insisted last year that he had no business in Sri Lanka and had never met the former President 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 some members of the powerful political 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 Sri Lanka’s political 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 Serviços 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 Presidency.
Searching for Sri Lanka’s embezzled billions is a daunting task for the new regime, which came to power when former President Rajapaksa was finally ousted by voters in January this year, especially because it presides over a country still emerging from decades of civil war. Cabinet Spokesman Rajitha Senaratne told BuzzFeed News that investigators believe the political family under question had gone to extraordinary lengths to hide stolen assets from the state.
In total, the new government estimates that the bigwigs and associates of the previous regime 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. (Buzzfeed News)