Fake Companies Set Up to Send USD 50 Million Out of the Country

According to a special statement made in Parliament by Minister of Public Security Ananda Wijepala, information has now been uncovered about a major financial racket in which nearly USD 50 million was illegally sent overseas under the guise of importing goods through fake companies. It was further revealed that funds connected to the recent highly controversial Rs. 13 billion financial fraud linked to NDB Bank had also been transferred out of the country through the same network.

This organized network had operated by falsely claiming to be engaged in business activities, without importing any goods into the country.

The origins of this large-scale racket came to light after police inspected a suspicious three-wheeler in the Peliyagoda area and discovered a stock of US dollars worth about Rs. 30 million inside. During questioning, the two suspects arrested at the scene and six others arrested later failed to provide a legal source for the money. Police suspect the funds were earned through drug trafficking.

After the Inspector General of Police intervened and handed over the investigation to the Central Crime Investigation Unit, it was confirmed that these funds had been issued by a private company named “Nes Gem.” Registered in 2025 under one director and shareholder, this company had not engaged in any legal business activity. However, on 953 occasions, it had electronically transferred Rs. 12.89 billion, or USD 42.7 million, to 256 companies in 26 countries.

Steps have now been taken to deactivate the company’s bank accounts maintained at the Kolonnawa branch of People’s Bank and the Wellampitiya branch of Sampath Bank.

Meanwhile, a separate large-scale racket was uncovered through four suspects arrested by Negombo Police with heroin. The suspects had deposited money earned from drug sales into a bank account in Divulapitiya, which was identified as belonging to a drug trafficker based in Dubai.

The money was later transferred to an account maintained at the Pettah branch of Commercial Bank under a company named “AY Investment.” This account, opened in 2014, had seen Rs. 2.2 billion circulate through it. Every few days, money withdrawn through cheques was sent to four current accounts at Union Bank. It was then transferred overseas through telegraphic transfers (T.T.), amounting to Rs. 13 billion.

Through these companies, which were not registered with Customs, more than USD 43 million was sent out of the country within a short period. Authorities have now taken action to suspend nearly Rs. 53.6 million of those funds.

Following the revelation that around 10,525 local companies, while posing as legitimate businesses, may have been involved in similar illegal activities, a special discussion was held under the leadership of the President with relevant officials.

As a result, all companies importing goods are now required to register not only with the Registrar of Companies but also with Sri Lanka Customs. The use of a Tax Identification Number (TIN) has also been made mandatory.

The government has also taken steps to draft new laws to investigate offences under the Exchange Control Act, in an effort to curb financial crimes that had allegedly grown over time under political protection. The authorities say strict legal action will be taken to restore strong financial discipline in the country.