Investigators of import payments transfer case have failed to verify from foreign exporters: Counsel for AY Investments

Sections of the print, electronic and related media, have given extensive coverage to reports of alleged transfer from Sri Lanka, of substantial payments effected to foreign exporters of goods, alleging further that no goods had come into the country, without any verification by the investigators, either directly or through the banks, of the goods exported to Sri Lanka, in respect of the payments received by them.

President’s Counsel M.M. Zuhair in a statement yesterday said the reports have implicated, AY Investments Impex Ltd., Director Jiffry Mohamed, our client, as one of the persons involved in the transfers of payments. This media release, based on instructions, is intended to help clear the erroneous impressions that may have been created in respect of his client.

“We have on behalf of our client and his company filed of record in the appropriate fora that our client, his said company or any of his 34 associate companies are not importers of goods but provide operational services for a commission by receiving deposits from importers’ brokers into his companies’ rupee accounts and transferring or delivering in rupees to Central Bank licensed commercial banks,” Zuhair said.

The said banks being obliged under Government regulations to exercise due diligence, thereafter convert the rupees into foreign currencies and remit the payments to the overseas exporters.

The said transfers by the banks are lawful transactions under the “Special Import License and Payment Regulations No 1 of 2011” issued by the President of Sri Lanka on 31 December 2011, under the Import and Export (Control) Act and Article 44 of the Constitution. Three provisions of these regulations were amended by the incumbent President by gazette notification issued dated 18 June 2026.

Zuhair said Police investigators have referred to over 10,157 payment transactions made by 89 companies but had not made any reference in the reports filed with the authorities to the said Payment Regulations No 1 of 2011 under which the banks had lawfully transferred the said advance payments.

Police have said that investigations are ongoing to ascertain possible violations under the Prevention of Money Laundering Act. 

“Our client is in remand since 20 June 2026 pending investigations. No offence has been alleged under the Payment Regulations Act No 1 of 2011, the single most important law which for the past 15 years had been facilitating advance payment permitting goods to arrive within six months to two years,” the statement added.

In terms of Regulations 18 of the said Payment Regulations No 1 of 2011, the duty of monitoring the payments made in terms of regulation 3 to regulation 17 is vested in the Controller of Exchange and the Controller of Imports and Exports. During the past 4 years from 2023, no irregularity had been reported against a single bank, though all banks had transferred foreign currencies totalling in 10,157 transactions. The law presumes that the said 10,157 transactions had been duly done.

Under Regulation 22, where any bank acts contrary to the regulations, the Director General of Customs (DGC) was required to forthwith notify the Head of the Department of Exchange of the Central Bank and the Controller of Imports and Exports together with all details thereof with documentary evidence thereof. During the first three years since 2023, no such report had been made to the named authorities in respect of the transactions done by the banks in 2023, 2024 or 2025, obviously because there had not been any irregularity in the said transactions.

The regulations have also not made the importers, brokers or anyone else accountable for any irregularity under the said regulations. Fixing a man on the street for the accountability of the State, if any, would be seen as unjust, arbitrary, and in violation of the Regulations and the Constitution.

Investigators have so far avoided doing the obvious checklist. Importers have paid through the banks to import goods. It is widely believed in the trading circles that goods had arrived from time to time, in respect of each of the 10,157 transactions. If not the importers would not have at least during the past four to fifteen years, not sent any more funds to banks for payments.

All that the Banks, some of which are headed by retired Supreme Court Judges, for their own credibly sake can do, on their own, to establish the regularity of the transactions, is to fax the foreign exporters to whom they had transferred payments, asking them to send copies of the Bills of Lading in respect of the exports done by them of each of the transactions that had gone through their banks.