Ravi urges CoPF to summon CBSL, banks over alleged $ 1 b trade fraud

• Calls for Governor, FIU, Bank Supervision Department, Customs and 13 banks to face parliamentary probe
• Alleges 105 shell companies behind phantom imports resulting foreign currency outflows
• Claims crypto regulatory gaps and weak oversight may have enabled parallel capital flight and tax evasion

UNP MP and former Finance Minister Ravi Karunanayake has called on Parliament’s Committee on Public Finance (CoPF) to launch an urgent institutional inquiry into the alleged $ 1 billion foreign exchange fraud highlighted by President Anura Kumara Dissanayake, urging the committee to summon senior Central Bank officials, Customs authorities and the chief compliance officers of 13 commercial banks.

In a letter dated 29 June to CoPF Chairman Dr. Harsha de Silva, Karunanayake argued that the alleged large-scale foreign exchange losses warranted immediate parliamentary scrutiny extending beyond the businesses and individuals directly implicated in the investigation.

He contended that the inquiry should focus on whether regulatory institutions responsible for banking supervision, anti-money laundering, foreign exchange monitoring and customs oversight had failed to detect or prevent the alleged fraud.

Referring to recent disclosures by President Dissanayake and Public Security Minister Ananda Wijepala in Parliament, Karunanayake said COPF could not delay or dilute its oversight responsibilities if the allegations proved to be accurate.

“The Committee on Public Finance is constitutionally mandated to exercise strict oversight over public finance and safeguard the economic interests of Sri Lanka,” he wrote.

Karunanayake noted that the President had alleged that Sri Lanka had suffered losses of approximately $ 1 billion, or nearly Rs. 340 billion, since 2024 through fraudulent telegraphic transfers and advance payments for so-called “phantom imports” where no goods had entered the country.

He also cited investigations disclosed by the Public Security Minister, including one involving Rs. 12.89 billion remitted overseas through 953 allegedly fraudulent transactions and the use of more than 100 shell companies.

A key element of Karunanayake’s proposal is a call for COPF to examine what he described as the “critical blind spot” of Central Bank supervision.

Although acknowledging that the Government has introduced emergency controls through the Imports and Exports (Control) Regulations No. 06 of 2026 and the Repatriation of Export Proceeds Rules No. 2 of 2026, he argued that the broader question of regulatory accountability remained unresolved.

Karunanayake questioned how, according to figures cited in his letter, more than 26,000 allegedly fraudulent telegraphic transfer transactions routed through 227 bank accounts across 13 commercial banks could have escaped detection over a two-year period.

He claimed that such transaction volumes should ordinarily have triggered automated supervisory alerts or anti-money laundering monitoring systems.

“The Bank Supervision Department and the Financial Intelligence Unit possess sweeping statutory powers to audit, monitor and track macro-financial flows,” he said, adding that the alleged scale of the transactions suggested either systemic regulatory failure or a breakdown in Know Your Customer (KYC) and Anti-Money Laundering (AML) controls.

Karunanayake further requested COPF to revisit concerns he had previously raised before the committee regarding cryptocurrency regulation.

He said he had warned the Central Bank during a COPF meeting on 21 January 2025 that unregulated digital currency operations could facilitate parallel capital flight, tax evasion and the movement of funds outside Sri Lanka’s regulatory framework.

According to the letter, the committee should examine whether the absence of clear cryptocurrency regulations had been exploited alongside trade-based fraud.

He argued that the Central Bank should explain why regulatory concerns raised more than a year earlier had not been followed up.

Karunanayake recommended that COPF summon:

• The Governor and senior officials of the Central Bank, particularly the Bank Supervision Department and Financial Intelligence Unit, to explain operational and supervisory lapses between 2024 and 2026.

• The Controller General of Imports and Exports and the Director General of Sri Lanka Customs to explain why data-sharing failures prevented real-time verification of imports against outward remittances.

• The chief compliance officers of the 13 commercial banks allegedly involved, to account for internal control failures and oversight mechanisms.

• Any additional regulatory or enforcement agencies deemed necessary by the committee.

He maintained that accountability should begin with the institutions entrusted with safeguarding the country’s financial system rather than relying solely on post-event investigations.

“If this Committee fails to take an uncompromising, aggressive stance on this matter, we will be failing our constitutional duty to oversee public finance,” Karunanayake said.

He requested that the proposed institutional cross-examination be included as a priority agenda item at COPF’s next sitting and that the relevant institutions be called before the committee at the earliest opportunity.