Central Bank issues a red notice to media institutions promoting fraudulent investments

The Central Bank of Sri Lanka has issued a strong warning to all media institutions in the country to immediately cease promoting fraudulent financial and plantation investment projects that obtain money deposits from the public without any regulation or registration by the Central Bank, as well as publishing advertisements for such projects. Despite numerous awareness campaigns conducted by the Central Bank, it has been observed that innocent people are losing large sums of money due to the broadcasting of promotional programs and interviews by such unregulated fraudulent entities through some leading media institutions.

Accordingly, it has been decided that media institutions providing their platforms to such fraudulent entities will henceforth be considered partners in the relevant financial crime, and the law will be strictly enforced. Legal action is to be filed in the High Court against heads of media institutions and journalists who violate these regulations, with legal provisions for a maximum fine of five million rupees or imprisonment up to five years, or both penalties. Furthermore, it is emphasized that the relevant media institutions are legally bound to settle the lost deposits of victims under court supervision.

The primary reason for the Central Bank taking this immediate action is an interview broadcast on the state-owned Independent Television Network on June 8th. During that program, Mr. Malwattage Ranjith Nandana Peiris, a director of a company named 'Kasagala Green Plantation Pvt Ltd', made a false statement claiming that his plantation investment project was regulated by the Central Bank. Based on this incident, the Central Bank has already initiated a special investigation to determine whether the said company has illegally obtained public deposits in violation of the Finance Business Act No. 42 of 2011.

In this regard, the Governor of the Central Bank has sent a special letter informing all heads of media institutions, clarifying the legal responsibility of media institutions under Sections 49 and 56(4) of the Finance Business Act. Accordingly, it has been further informed that it is the legal responsibility of media institutions to mandatorily verify and confirm whether any institution is a legitimate entity included in the approved list of the Central Bank of Sri Lanka before publishing an advertisement for deposit-taking or investment promotion by that institution.