ISSN: 1391 - 0531
Sunday, December 03, 2006
Vol. 41 - No 27
Financial Times  

GoldQuest founder has demi-god status

Stake in JKH gives it respectability

When Vijay Eswaran, a founder and managing director of GoldQuest which has led an allegedly shady trail across many countries, walks into a room filled with his associates, they bow in respect and kiss his feet!

“I have personally seen this happen in Malaysia and in a Colombo hotel lobby,” says a former business associate adding that the businessman has a kind of demi-god status.

GoldQuest, part of Quest International Ltd, has been embroiled in a massive tussle with local Central Bank authorities which has banned its controversial network marketing schemes. The Hong Kong-based group with offices in Malaysia has tried other ways of re-entering the market and enticing Sri Lankans with retailing numismatics, collectable coins, medallions and other valuables. But the CB has been watchful – though recent events may prove otherwise – in ensuring these dubious schemes don’t return to the market.

Two weeks back, GoldQuest made a major acquisition taking a five percent stake in John Keells Holdings (JKH), Sri Lanka’s biggest listed conglomerate which according to informed sources would have been worth about US$ 40 million.


This narrative, based on information that The Sunday Times FT has received from various sources, is not about GoldQuest but the man who set it up and hobnobs with high society across many regions. Eswaran was unavailable for comment.

Vijay Eswaran, according to information accessed from the Internet, has a B.Sc Socio-Political Economics (University of London), Dip. Journalism (London School of Journalism), M.Sc Management (University of Illinois) and worked with IBM for six years.GoldQuest, now with major investments in the Colombo bourse – all through front companies like Fast Gain or Suntex -- first came into stockmarket through an investment in Asian Hotels.

At the end of 2001, business tycoon and stockmarket player Nahil Wijesuriya had acquired a 25 % stake in Asian Hotels.

Malaysian businessman Azmi Wan Hamza then had the majority stake of 26 %. Wijesuriya, sources say, was concerned about the way the company was being run.

He was offered a board seat but David Watts blocked Wijesuriya from getting on the board, the sources said adding that together with Dr Sena Yaddehige, Chairman of the Richard Peiris Group, he wanted to buyout Asian Hotels.

That however didn’t work out and then comes GoldQuest into the picture. The company was dealing with numismatics. The company was also renting apartments at the Crescat – taking some 10 apartments at a time.

Eswaran was a regular visitor and by end 2001 showed interest in the stockmarket. He had reportedly said he was interested in buying Asian Hotels.

But former GoldQuest employees say Eswaran’s real strategy was not to buy into the company, rather it was to have a stake and be among the country’s movers and shakers – the policy makers, the people that mattered.

Wijesuriya then sold his stock in June 2002 to GoldQuest and the latter offered to buyout the hotel company but Hamza and Watts closed ranks and refused to sell out.

In the meantime, Eswaran was expanding his group’s empire, sending advisors to many parts of the world including Monaco to look at investments. GoldQuest’s Monaco connection figured recently with accusations that Central Bank Governor Ajith Nivard Cabraal was linked to GoldQuest and had been invited for a GoldQuest event in Monaco.


While GoldQuest’s Sri Lankan operation was gradually enticing many locals into the network marketing ‘opportunities,’ Eswaran continued to build his empire.

“Vijay is a great to socialize with. Friends would sit around with him and smoke a cigar, have a drink, talk about family,” a former associate recalled.

Subsequently GoldQuest sold out of Asian Hotels when Eswaran’s bid to take a majority stake failed. The company made a cool US$11 million profit from the deal.

Insiders say Eswaran’s plan to buy Asian Hotels was part of a plan to expand his real business – selling coins through a classic pyramid scheme.

QI Investments Ltd bought into NDB Bank taking a 15 %. Because it was merging with NDB, QI expected Harry Jayawardene to take a major stake and was planning to offload is shares at a premium.

Jayawardene, insiders say, wanted to go into insurance and NDB was a cash cow. Eswaran however was also interested in raising the GoldQuest stake in NDB and after the 15 percent stake in November-December 2003 was purchased, he announced at a public function overseas that GoldQuest or QI was now controlling NDB Bank.

Eswaran was also in talks with Sri Lanka Telecom and its chairman, the controversial Thilanga Sumathipala. Both parties, according to local reports, at that time were keen on setting up a call centre operation.

Then the troubles started when Goldquest got busted over one ‘coins’ consignment and got in the exchange control difficulties. It was also accused of breaking laws in the use of credit card transactions.

How does Eswaran operate? The Sunday Times FT made several attempts two years ago to interview him but were unable to.
Eswaran makes people dependant on him through the network marketing scheme. People worship him and for employees who don’t ‘kiss his feet’, he has tried to convince them to do so saying it’s just a mark of respect.

Associates or ‘disciples’ have kissed his feet in public, insiders said adding that he believes it’s a mark of respect for a teacher.


The law is behind the GoldQuest group and Eswaran in some countries. In August 2003, Tamil Nadu officials arrested Goldquest officials involved in a scam and officials were hunting for Eswaran and another from Malaysia. In Nepal, a GoldQuest female director escaped jail.

Eswaran was smarting after he lost control of NDB. He wanted control of the Bank to use it to influence people and be accepted as a respected businessman.

But the proposed NDB acquisition also didn’t work as the NDB refused to register new stock which came from an allegedly front company.

Earlier this month Eswaran moved to JKH and pumped in millions of dollars to take a five percent stake earlier this month.

JKH is controlled by Sohli Captain, Raj Rajaratnam, Ken Balendra and others.

Insiders say GoldQuest’s stake is to gain respectability and later once the dust settles to move back into its core business.

The question being asked is whether GoldQuest with interested parties are planning to take control of the company or helping others to do so? If that happens, GoldQuest will have the last laugh by owning a group that controls the former Asian Hotels. “They (GoldQuest) don’t have money to buy into JKH. So where does this money come from?” one insider asked.

At the recent road show organized by the Colombo Stock Exchange to promote Sri Lanka as an investment base, investors raised questions about alleged money laundering activities and the lack of action by the authories.

Sri Lankan officials were asked what action the authorities were taking against recent share acquisitions in Sri Lanka by companies with questionable backgrounds, which was believed to be a reference to GoldQuest’s entry into the JKH stock.


Eswaran, insiders say, craves for recognition and would want a board seat on a premier blue chip company like JKH.

Eswaran’s group operates through front companies like Fast Gain or Suntex which recently ousted its founder chairman Jayantha Fernando out of the board of Ferntea. This company is the first listed firm to be owned by a GoldQuest-associate.

The Fernando family was completely foxed by the machinations of the GoldQuest-led Suntex engineered by Nirmala Anura Fernando, now the current chairman of Ferntea.

The company however is heading for a huge legal battle with the latest dispute being the legality of GoldQuest having a major stake in a retail and trade firm which is an exchange control violation.

Anura Fernando is also said to have a chequered past and digging into some old records, The Sunday Times FT found that he had been questioned in India in the late 1990s in connection with forged currency.

A Sunday Times report on July 19, 1998 quotes reports from India as saying that the Special Investigating Team (SIT) which probed the assassination of former Indian Prime Minister Rajiv Gandhi had denied a Jain Commssion allegation that Fernando was involved in the conspiracy. That report was headlined “Mr Fernando not involved in Rajiv murder.”

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Copyright 2006 Wijeya Newspapers Ltd.Colombo. Sri Lanka.