Govt seeks StAR help to recover stashed assets

by Manjula Fernando

The Government has sought assistance from the World Bank’s Stolen Assets Recovery Initiative (StAR) to help recover billions of US Dollars, stashed away in foreign banks, allegedly by ministers of the former government and top officials.

The World Bank may demand a significant chunk of Sri Lanka’s stolen assets to be recovered from overseas financial institutions as part of the deal it has struck with the Government in return for its expertise and hard work, Sunday Observer learns.

The sources said the deal between the World Bank and the Government is not quite clear but the investigations by StAR seem to be proceeding, an indication that the Government may have consented to the arrangement. An official said the World Bank’s asset recovery team will return to the country next week to begin investigations. They will probe mega scale financial frauds and locate the assets stashed away in foreign countries.

The team first arrived in the country on March 4 and met Ministers and a number of top notch government officials within a span of several days.

The StAR is a partnership between the World Bank Group and the United Nations Office on Drugs and Crime (UNODC) that supports international efforts to end safe havens for corrupt funds. StAR works with developing countries and financial centres to prevent the laundering of the proceeds of corruption and to facilitate more systematic and timely return of stolen assets.

During his visit to the United States Minister Mangala Samaraweera and senior lawyer J.C.Weliamuna met World Bank officials to obtain their assistance for the investigations.

Cabinet Spokesman Minister Rajitha Senaratne said the Government has learnt that state assets to the tune of US $ 10 billion have been plundered and taken out of the country by certain key players of the former government from time to time.

Initial investigations have traced US$ 2 billion, one-fifth of the stolen assets, to a Dubai Bank. A senior government Minister alleged the former Central Bank Governor, former Foreign Affairs Monitoring MP, Presidentail aide Gamini Senarat and a senior member of the previous Cabinet were being investigated in connection with the case.

Soon after the election on January 8, there has been large withdrawals as much as US $ 600 million from this account allegedly by the son of a top official of the former regime. There is evidence that the money had been re-deposited in accounts in Ukraine, Seychelles and Bahamas, he said.

The anti-Corruption Committee Secretariat has received a complaint on suspicious transactions in the Seychelles branch of the state owned Bank of Ceylon. The Police Financial Crime Investigation Division has already begun investigations on the case.

The minister said that any foreign investments in Seychelles by Sri Lankans could be verified under the Double Taxation Avoidance Agreement signed between the two countries, which included a standard Tax Information Exchange Component.

Chinese President Xi Jinping said the government is optimistic about Chinese help in the investigations.

In addition to StAR the government has also sought help from other global financial institutions and several foreign government’sincluding the Seychelles and the United Kingdom to trace the hidden assets.

The Financial Intelligence Unit of the Reserve Bank India (RBI) and the IMF have also extended assistance to solve the mystery of stolen finances.

A spokesperson for the Bribery Commission told the Sunday Observer that they lacked jurisdiction to investigate complaints on plundered money hidden overseas and such cases are being handed over to the Financial Intelligence Unit of the Central Bank.