Sri Lankans were among them — royalty, actors, politicians, corporate executives, old wealth families, international outlaws and businessmen — who had secret Swiss Bank accounts. Their records at the HSBC Private Bank Suisse not only show their inner workings but provide a rare glimpse of the super secret Swiss banking industry. The documents, including those of some 40 Sri Lankans, was obtained by the Washington-based International Consortium of Investigative Journalists (ICIJ) from the French newspaper Le Monde. Collaborative projects that followed with a team of journalists from 45 countries unearthed bank accounts maintained by criminals, traffickers, tax dodgers, politicians, businessmen and celebrities.
The ICIJ is a global network of more than 190 investigative journalists in over 65 countries. They collaborate on in-depth stories. Membership in the organisation is peer recommended. Founded in 1997 by the respected American journalist Chuck Lewis, ICIJ was launched as a project of the Washington-based Centre for Public Integrity. Their style of watchdog journalism focuses on issues that do not stop at national frontiers: cross-border crime, corruption, and the accountability of power. Backed by the Centre and its computer-assisted reporting specialists, public records experts, fact-checkers and lawyers, ICIJ reporters and editors provide real-time resources and state-of-the-art tools and techniques to journalists around the world. The Sunday Times Consultant Editor Iqbal Athas is the only Sri Lankan member of the ICIJ.
The ICIJ said that among the many grim stories, at least one was ironic. People on the most wanted list of Interpol, the international police agency, such as diamond dealers Mozes Victor Konig and Kenneth Lee Akselrod, are among the HSBC account holders – and so is Elias Murr, who is President of the board of Interpol’s Foundation for a Safer World, an organisation aimed at fighting terrorism and organised crime. Murr, who was a prominent businessman before entering politics, was interior minister of Lebanon in 2004 when an HSBC account owned by him was held through a company called Callorford Investments Limited. By 2006-2007, the account would contain US$ 42 million.
The secret files covering up to 2007 associated with more than 100,000 individual and legal entities from more than 200 nations. It’s not illegal in most countries to maintain offshore accounts. Some who are named in the files may have had some connection to a Swiss bank account, such as a power of attorney, while not owning the money in the account or owning only a share of it. Being identified as an HSBC Private bank account is of itself no indication of any wrongdoing. However, in Sri Lanka, the permission to open a foreign bank account requires the approval of the Central Bank. The Exchange Control Act (Section 6 AA) states:
“(1) No person in, or resident in, Sri Lanka shall, except with the permission of the bank,-
(a) open an account with any bank or institution doing any kind of banking business outside Sri Lanka (hereinafter referred to as a ” foreign bank”;
“(b) continue to maintain, or operate on, an account which has already been opened in any foreign bank; or
“(c) close an account with any foreign bank.
“(2) Where an account maintained by a person in, or resident in, Sri Lanka with any foreign bank is closed, such person shall not dispose of the funds to his credit at such foreign bank at the time of closing of such account, except in accordance with such directions as may from time to time be given to him by the Central Bank.”
A high ranking official at the Central Bank said that the question of granting permission for secret offshore accounts, which are to avoid taxes, does not arise. “Such accounts are a ruse to dodge taxes,” he said. As our front page story today reveals, the largest amount for the period 2006-2007 was in the name of the family of Edmund Wijesuriya Balasuriya. Together with his wife, daughter and three sons, their names are connected to accounts totalling over US$ 16 million or exactly $ 16,325,742. He is described in HSBC documents as “Director/Owner of a Shop of Games.” According to a HSBC document, on October 6, 2005 Balasuriya reportedly met a Bank official in London where the HSBC headquarters is located. It has branches in 74 countries. The document notes “the conversation covered our ideas concerning the family structure and I mentioned that he might consider a Delaware Trust if they wish his sister to be brought into the structure…”
Here is a breakdown of the family accounts listed in their names in HSBC documents: Mr and Mrs Balasuriya together are shown as holding a balance of US$ 10,668,094, daughter Lakshmi Fernando U $ 1,989,370, son Rohan US$ 1,975,594, three sons Mahendra, Lakshman and Asoka each held US$ 1,975,319. Referring to Lakshman, the HSBC document adds: “The family own hotels, a gem stone business and are now going into properties. They are very well connected in Sri Lanka. They operate from many towns in Sri Lanka and asked why bankers only seem to visit Colombo. He mentioned that many of the affluent family in gem stone business live in towns well to the south of Colombo and Kandy has many affluent families. He indicated that he was no longer visited by the UBS (Union Bank of Switzerland) which would indicate that the lady who left Barclays after us was no longer covering the region.
Connected to two accounts is the name Subramaniam Surendran. He is described in trade circles in Colombo as a businessman who had dealings with the Ceylon Electricity Board (CEB). Two different accounts were listed. The balance in one was US$ 6,564,952 and the other US$ 69,665. His wife, Charlotte Ranjitha, described as a ‘housewife’ in documents, is listed as holding in another account a sum of US$ 6,495,287. Surendran’s profession is described in documents as an “agent” and had on occasions dealt with the Bank through an authorised intermediary. He has also assigned his wife as the beneficiary.
Under Anura Leslie Perera from Bandarawela, believed to be a lawyer representing an account holder, is listed a balance of US$ 1,692,959. Documents reveal that he operated from an address in Nicosia and was in touch with the HSBC on the telephone. Vaswani Aruna Rajendra, though with a Sri Lankan address, operated from Perth, Western Australia. He held a balance of US$ 1,384,149. Three members of the Hirdaramani family, known in Sri Lanka for their textile business, are listed as holding balances as follows: Nikhil Kishore US$ 817,446, Vinod Kishore US$ 646,243. He held this together with Leena Vinod. Another account held by Leena Vinod also had the same balance of US$ 646,243. The names mentioned and those of others appear in the table given here. Also given in a table are those who have closed their account together with the period they were operated.
Among closed accounts is one in the name of Lalith Bhupendra Kotelawala who holds Sri Lanka’s highest honour – the title of Deshamanya (Pride of the Nation).” He is the Chairman of Ceylinco Consolidated. The Golden Key Credit Card Company, a member of his group, crashed leaving thousands of depositors in despair. He opened the HSBC account on December 21, 1988 and closed it over eight years later, on March 3, 1997. He was awarded the Deshamanya title in 1994 when his secret account was still in operation. The Sunday Times found that he had not declared this offshore account either to the Department of Exchange Control or the Department of Inland Revenue. Similarly, Daya Ranjit Senanayake, his onetime deputy had also opened an account and later closed it on the same dates but made no disclosure.
When the revelations from the ICIJ came, the HSBC first requested them to destroy all the data. However, after being informed of the full extent of the reporting team’s findings, they gave a final response that was more conciliatory, telling ICIJ “We acknowledge that the compliance culture and standards of due diligence in HSBC’s Swiss private bank, as well as the industry in general, were significantly lower than they are today.” The written statement said the bank had “taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards, including those where we had concerns in relation to tax compliance.” The bank added that it had re-focused this part of its business. “As a result of this repositioning, HSBC’s Swiss private bank has reduced its client base by almost 70 per cent since 1997,” HSBC said.
The response to the Swiss leaks investigation was swift and global. HSBC officials were summoned to appear several times before the public accounts committee in the UK; countries including Brazil, Argentina, Belgium and France started or deepened official inquiries into the matter; and many other countries requested the so-called Falciani files from the French Government and have started to recover tax money lost to their national treasuries. The data were originally smuggled away by a HSBC employee turned whistle-blower Herve Feliciani and handed over to the French authorities in 2008. Le Monde obtained material from the French tax authorities. The ICIJ put a team of journalists from multiple countries to sift through the data and unravel startling details. Among facts that came to light was how former and current politicians from Britain, Russia, Ukraine, Georgia, Kenya, Romania, India, the Philippines and Algeria held offshore accounts.
“Banks play an essential role in keeping criminals and kleptocrats of the financial system,” Marina Walker Guevara, Deputy Director of the ICIJ told the Sunday Times. She said, “HSBC Geneva failed to live to those high standards in the past and as a result a whole range of bad actors were able to hold accounts alongside people who had done nothing wrong.”
In 2013 the ICIJ exposed secret accounts of those holding them in the Singapore based Portcullis TrustNet including a group of Sri Lankans.
Last edited by Quibit on Sun May 17, 2015 8:36 pm; edited 2 times in total