How a Diplomat’s Secret Account Cracked Open Sri Lanka’s Offshore Empire

When investigators in Singapore stumbled upon a forgotten account linked to a former Sri Lankan diplomat, they didn’t expect to peel back the shell of one of the island’s biggest financial scandals. But that single lead — a dormant account once belonging to a High Commissioner turned Governor — has now exploded into a 12,000-name dossier and a USD 2 billion offshore maze stretching from Singapore and Malaysia to Labuan, Dubai, and even San Marino.

The picture is ugly. What began as a diplomatic probe has become a mirror reflecting the hidden culture of “institutionalised offshoring”: politicians, customs chiefs, lawyers, clergy, and businessmen quietly moving money out of a collapsing economy.

The Diplomat Who Lit the Fuse

In early 2024, Singapore’s regulators flagged unusual transfers tied to the former ambassador-cum-Central Bank governor. The transactions didn’t match his declared assets. Within weeks, investigators had mapped dozens of connected accounts — and then thousands. “It looked like a private banking ecosystem built on public money,” an International Fraud Detection Network officer said.

Labuan — the Tropical Vault

Labuan, a small Malaysian island, turns out to be the preferred hiding spot for South Asian elites. Over 2,000 Sri Lankans, including retired secretaries and ex-customs directors, hold accounts there through “nominated companies” that blur ownership.

Singapore & Malaysia — Clean Fronts, Dirty Flows

Behind Singapore’s reputation for order lies a quiet storm: 5,000 Sri Lankan accounts, many created under the banner of “trade facilitation.” Investigators found fake invoicing, inflated import bills, and transfer-pricing tricks funnelling dollars out of Colombo. Malaysian banks in Kuala Lumpur and Penang acted as silent intermediaries.

The Spectrum of Offshore Holders

The leaked list reads like a national audit of hypocrisy — ministers from both parties, President’s Counsels, monks running schools, and business magnates from construction to garments. “This isn’t petty theft,” one analyst said. “It’s economic sabotage disguised as accounting.”

The Gulf & European Extensions

Parallel trails lead to Dubai and Abu Dhabi — 9,000 more accounts worth USD 3 billion — and to San Marino, Europe’s tiny laundromat where Sri Lankan funds arrived via “investment residency” schemes.

Who Watches the Watchers?

Among the names are customs officers who once enforced currency rules. One retired official earning under LKR 250,000 a month reportedly sits on USD 1.4 million spread across Bangkok, Singapore, and Dubai.

Care Homes and Clean Hands

A former aide to ex-President Sirisena, now living in Dubai under British citizenship, allegedly channelled laundered funds into care-home ventures in the UK. Investigators call it “laundering through compassion.”

The Missing Bill — Five Billion Dollars and Counting

Economists estimate Sri Lankans’ undeclared offshore wealth at over USD 5 billion — nearly 10 percent of GDP. “It’s not corruption anymore,” said Dr Perera in Colombo. “It’s a parallel economy.”

The NPP’s Test

The new National People’s Power government vows to bring the money home via a Joint Asset Recovery Task Force and new laws targeting dual citizens and offshore passport-holders. But success will depend on cross-border cooperation and political will — both in short supply.

Between Privacy and Accountability

Not every foreign account is criminal, experts warn, but the dossier focuses on politically exposed persons, not workers abroad. “These are vaults, not salaries,” a compliance officer in Singapore said.

The Old Ghosts

Most of the system was built under the Rajapaksa years and refined under subsequent governments. Infrastructure kickbacks, the bond scandal, and selective amnesia all helped normalise the habit of hiding wealth abroad.

The Final Question

As the leaks begin to surface, Colombo waits. Will the NPP government truly pry open the vaults of Labuan and Dubai? Or will another generation of “rotten eggs” roll away untouched?

For once, the data trail is too detailed to deny — and this time, the smell is too strong to ignore.