Frozen TRO funds in local banks just a trickle

Tamil Rehabilitation Organisation (TRO) funds estimated up to Rs. 80 million have been frozen in Sri Lanka though the group, which is widely believed to be an LTTE front, had withdrawn much of its funds from local bank accounts by the time the Central Bank on August 28 last year had decided to act.

When the Central Bank moved to freeze the TRO’s local bank accounts, it made inquiries from a private bank that maintained 66 TRO accounts about the need for such a large number of accounts for a single organization. The private bank had said that each account was in respect of various projects. However the bank was able to submit only 10 project reports to the Central Bank, The Sunday Times learns.

It is learnt that the TRO had received Rs. 4 billion in tsunami funds – ten percent of all tsunami funds Sri Lanka had received -- between January 2005 and June 2006 through Sri Lankan banks. Of this amount, domestic transfers/credits to the TRO accounts amounted to Rs. 2.6 billion.

The organisation received 50 per cent of its foreign remittances from the United States with the TRO USA accounting for half this amount. In August last year alone, US $ 566,000 (Rs. 60 million) was remitted by TRO USA – registered as a charity organisation in Cumberland in Maryland, USA -- to the TRO and various affiliated organisations in the north and east. Transactions of the TRO USA are being investigated by US authorities who say the TRO is an LTTE front organisation involved in arms procurement.

The Central Bank of Sri Lanka decided to freeze TRO funds in August last year following reports that the TRO was being investigated in the United States in connection with arms procurements on behalf of the LTTE. The freezing of the account was ordered by the Governor of the Central Bank under provisions of the Financial Transaction Reporting Act.

Investigations have revealed that INGOs such as the UNDP, the UNICEF, Save the Children, Action Aid, and the ILO had transferred funds directly to the TRO for the group to carry out humanitarian projects in LTTE-controlled areas. The Sunday Times learns the TRO which pledged to construct 639 housing units in the north and east after the tsunami had completed only 100 so far.

Since 2003, the TRO had maintained 164 accounts in branches of seven leading banks -- the People's Bank, the Bank of Ceylon, Hatton National Bank, Commercial Bank, Seylan Bank, PABC and Standard Chartered Bank. Of these accounts, 148 were in the North and East. When the Central Bank froze the TRO funds, the TRO had some 50 million rupees in its 148 accounts in the north-east banks.