While the major economies of the world grapple with the worst financial burnout in decades, thousands of investors in Sri Lanka face a problem closer at home — possibly the biggest financial scam in recent times.
Unconfirmed reports have put the number of people swindled at three to four thousands and the money involved at Rs 1 billion.
For a country of about 19 million, these are big numbers.
At the centre of this rip-off, reported in the media as the ‘Sakvithi scam’, is Sakvithi Ranasinghe, a man in his late 30s. In his black suit, pink shirt and white tie with an open laptop on his corporate desk, Sakvithi looked every inch the businessman he claimed to be.
He was also the ever-smiling and popular teacher of English, hosted a weekly television show on a government channel and ran investment and construction companies. Sakvithi sir, to his students, promised the world to his clients.
Late September, the facades peeled off and that world came crashing down. Thousands of unfortunate investors discovered who Sakvithi actually was — according to the police and the Central Bank — an out-and-out swindler.
Reports said that thousands had invested money in a scheme floated by him, in which a much-higher interest rate compared to banks was offered.
If the investors hoped for some government intervention, all they got was a political slugfest.
The main opposition party, United National Party, put the blame on the Central Bank for not taking action against the Sakvithi group of companies. UNP General Secretary Tissa Attanayake said the parliamentary Committee on Public Enterprises (COPE), in its report submitted to Parliament in 2007, recommended that the Central Bank should look into the unauthorised financial institutions and take action appropriately. But those recommendations were not heeded, he said.
SS Ratnayake, director, non-banking financial institutions in the Central Bank, said his hands were tied because of lack of direct evidence.
“We had seen specific advertisements put out by the Sakvithi group on high interest rates and were keeping tabs on him.
He was offering 72 per cent interest per year while banks usually do not offer more than 20 per cent per annum. We were collecting information on him since May this year but could not act because there was no proof,” Ratnayake said.
By the time, a Central Bank team raided the Sakvithi’s office in September, he was gone. Many believe he has slipped into India. Left behind are a trail of desperate investors and a possibly a lesson on where not to invest one’s hard-earned money.