SL Govt. tackles another dispute over funds
The Sri Lankan government, hot on the heels of two financial misappropriations – the US$2.5 million Treasury heist and US$ 600,000 lost by Sri Lanka Post – has been able to deter what they believe to be the manipulation of World Bank project data and assets.
Finance Ministry sources said that “some parties” within a government agency had manipulated Cyclone Ditwah damage assessments showing that the project was to the value of US $2 billion when the World Bank had estimated the damage at US $4.1 billion, in an attempt to undermine international trust and bring disrepute to the government.
The matter was discovered when ministry officials were preparing debt restructuring papers for the International Monetary Fund (IMF).
The series of such incidents have triggered high-level investigations by the Criminal Investigation Department (CID), the Financial Intelligence Unit (FIU), and international agencies like Interpol and the Australian Federal Police.
In the misuse of public funds, the World Bank and the Stolen Asset Recovery (StAR) Initiative are currently providing technical assistance to the Ministry of Justice to track and re-assign assets earned through criminal activities, a senior official of the ministry told the Sunday Times Business.
In another incident the World Bank audit confirmed a financial misappropriation in the implementation of Agriculture Sector Modernisation Project (ASMP) designed to modernise Sri Lanka’s plantation sector and agricultural estates.
It has found that the intended estate modernisation and agricultural improvements had not been implemented by the beneficiaries selected by the previous regime. The Treasury had to reimburse $508,863 recently following cabinet approval.
Meanwhile the recent Treasury breach of $2.5 million has exposed severe capacity limitations in debt management, leading experts to call for hiring more qualified professionals to handle complex global financial operations.
The IMF is reportedly monitoring these developments as part of its oversight of Sri Lanka’s economic recovery programme.
Despite a 14-tier approval process for such high-value transactions, the fraudulent instructions bypassed all established protocols.
The External Resources Department was reportedly handling the debt servicing communication despite the Public Debt Management Act vesting such powers solely in the newly established Public Debt Management Office.
A separate investigation is underway regarding the US$625,000 remitted by Sri Lanka Post to US Post, which was not received by the intended recipient.
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