Biggest fraudster finally in the net

By Sureka GALABODA

Depositors of Sakvithi Finance Company were in for good news on Friday afternoon as police announced the arrest of the biggest fraudster in the country, Sakvithi Ranasinghe . He was arrested along with his wife in Nawagamuwa on the way to see some relations. He, together with his wife and directors of the company, had defaulted 5000 depositors of over Rs. 900 million. He had even fooled his staff and service providers such as van owners who hired vehicles for his use. He also carried out a construction business and was engaged in buying and selling property.

The scam was exposed following an investigation by the Central Bank on unregistered financial institutions in late 2008. Members of the public who lost money in the Sakvithi scam blamed the Central Bank, the Inland Revenue Department and other Government bodies for allowing unscrupulous or dubious persons to freely run finance companies, with no outside controls over their operations.

When contacted over the issue, Central Bank officials said they handed over the information about the company to the police and as Sakvithi Finance Company was not licensed, the central bank has no liability. Sakvithi, as he was popularly known, was an English language tuition teacher by profession. He operated under many names including Chandrakumar Ranasinghe, A.R.M.C Weerakumaran and Chandra Weerakumara. His wife is Jamburagoda Gamage Kumari Anurandini. They had lived at No. 175/4, Madiwela Road, Embuldeniya. He started his finance company in 2003 and boasted that an interest of Rs. 4,000 to 6,000 would be paid for every deposit of Rs. 100,000. He operated his business in Kandy, Kurunegala and Ratnapura with a head office in Nugegoda.

Sakvithi means king of kings, but in this instance it would have to be changed to mean biggest fraudster. The majority who had opted to deposit money at his company were middle-income earners who had either deposited their life’s savings or had pawned their jewellery or sold their lands in anticipation of a higher return. He rose to popularity with the meeting of senior journalist and director of a leading television network with whose help he hosted many TV programs on English.

Many of the people who spoke to the media said that they had placed trust in the company due to the involvement of this well-known figure in the company. When questioned by police, the media personality had denied any knowledge of the company swindling investors.

An avid casino player, Sakvithi had busted large sums of money in gambling Central Bank Governor Ajith Nivard Cabraal said that Sakvithi had operated 27 bank accounts, of which 21 were in one bank. He said during the past two years, the Central Bank had spent a colossal sum of money educating the public not to invest money in unregistered financial institutions.

In the aftermath of the Sakvithi finance company scandal, the Central Bank ran advertisements in all newspapers, warning the public against depositing in the following institutions: Okanda Finance Pvt Ltd at Waidya Road, Dehiwela and director - Okanda Silva; Nadini Finance Pvt Ltd of Reality Plaza, Jaela and directors - Awantha Sirisena and Kumari Thennakoon; Sakvithi House Constructions Pvt Ltd of Nawala Road, Nugegoda and directors Sakvithi Ranasinghe and Kumari Anuradhini; D.K. Udayasiri of Alankaraya, Moragane; Don Hasantha Narangoda of Sriyavi Homes, Lands and Investments of Dandugama, Jaela and Piyadasa Ratnayake alias Danduwam Mudalali of Gurupokuna, Hungama, Hambantota. Sakvithi-jittery investors flocked to the residence of Piyadasa Ratnayake at Gurupokuna Hungama to claim their deposits, just two weeks after the sakvithi scam came to light.

Chronology of events

2010

* Sakvithi Ranasinghe and wife arrested on August 6.

* Assets belonging to the Ceylinco Group identified for sale.

2009

* Ceylinco Chairman Lalith Kotelawala and others arrested over the Golden Key Credit Card Company Ltd scam. The Management of Seylan Bank and other mismanaged licensed finance companies under the Ceylinco Group handed over to the Bank of Ceylon by the government.

2008

* December Golden Key Credit Card Company Ltd charged with fraud. The company was accepting deposits, offering interest rates of 24-28.5 percent without being a licensed financial institution.

* October - Piyadasa Ratnayake alias ‘Danduwam Mudalali’ of Gurupokuna, Hungama arrested.

* September - Police say that Sakvithi has fled to Chennai on September 9.

* Sakvithi scam busted by the Central Bank following investigations on September 26.

* Central Bank takes regulatory action against six persons named by the Monetary Board for carrying out finance businesses without authority. The Central Bank directs such persons/organisations to comply with the requirements of the Finance Companies Act (FCA) and apply for registration under the FCA within one month from 24.09.2008 i.e., on or before 24.10.2008, and the public informed accordingly: Sakvithi House Constructions (Pvt) Ltd,Okanda Finance (Pvt) Ltd,Nadini Finance (Pvt) Ltd, Narangoda Liyanage Don Minol Hasantha Narangoda, the owner of the business name ‘Sriyavi Homes, Lands and Investments’,Piyadasa Ratnayake (Danduwam Mudalali) and D. K. Udayasiri are the six parties. Four of the above persons/organisations, namely Sakvithi House Constructions (Pvt) Ltd., Nadini Finance (Pvt) Ltd., Narangoda Liyanage Don Minol Hasantha Narangoda, who is the owner of the business name ‘Sriyavi Homes, Lands and Investments’ and D. K. Udayasiri had not submitted applications to register under the FCA. Therefore, the Monetary Board, under Section 11(2) of the FCA, directed them to repay deposit liabilities within one month from 30.10.2008 and furnish relevant details, including a list of depositors, within 15 days from 30.10.2008, to the Director, Department of Supervision of Non-Bank Financial Institutions of the Central Bank.

Of the six persons/organisations, only Okanda Finance Ltd. had submitted an application for registration, which was received by the Central Bank on 24.10.2008. However, this application did not fulfil the requirements for obtaining registration as a finance company. Therefore, Okanda Finance Ltd was directed to rectify the deficiencies within one month from 04.11.2008 to consider its application for registration.

Piyadasa Ratnayake alias “Danduwam Mudalali” had informed the Central Bank of his intention to submit an application and had requested an extension of time, as he had been in remand custody. Accordingly, he too was granted an extension of one month from 04.11.2008 to forward an acceptable application for registration. However, he was murdered and his body discovered months later.