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VAT investigation: Erroneous statements made against it, says CB
The Director of Information of the Central Bank has sent the following response to The Sunday Times news item published last week regarding the VAT fraud investigation.

“The Central Bank wishes to put records straight with regard to erroneous statements published in the said news item alluding that the Bank is not cooperating with the investigations conducted by the CID, as such statements can mislead the general public.

“1. It has been reported in the said news item that one of the suspects in the VAT fraud had invested large sums of money in Uganda and Vietnam and that the Ugandan Government appointed a special fact finding committee to probe into the businesses in Sri Lanka and when the Ugandan team arrived in Sri Lanka the Central Bank did not make a great effort to cooperate with the Ugandan team.

“According to the records available with the Central Bank, none of the persons mentioned in the news item has made any application for investment abroad. The Central Bank therefore, has not recommended to the Hon. Minister of Finance an application made by any such person for investment abroad.
“The Central Bank categorically denies the allegation that it did not cooperate with the fact-finding team probing into the businesses in Sri Lanka of any person mentioned in the news item, as there are no records of a request for a meeting made by an Uganda Team or any other team.

“2. It was also reported that one of the suspects had bought a flat in Singapore with funds fraudulently obtained and that CID had found that the Central Bank has no records of him being sanctioned to remit money to purchase the property.

“In terms of current Exchange Control regulations, release of foreign exchange for capital transactions such as acquisition of assets abroad requires prior approval of the Central Bank. According to our records, there is no evidence of granting permission to the persons mentioned in the news item to remit money to purchase properties abroad.

“Therefore, any remittance of money without the prior approval of the Central Bank as required by the Exchange Control Act is illegal. “3. It has also been alleged in the above news item that according to investigations, there was no record of money transfers by the suspects and that a Central Bank official who could help detectives with further information is said to be absconding.

“The CID has so far not contacted any Central Bank official in connection with its investigation into the VAT fraud. If the CID requires any information for the conduct of their investigations, the Central Bank will assist the CID. There is no reason for any Central Bank Officer to abscond in providing information. The allegation is totally incorrect and misleading.”
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