Colombo – Sri Lanka is investigating the dealings of a hedge-fund manager who was arrested in the United States to ascertain whether he financed a prominent front organization of Tamil rebels, the Central Bank said Monday. Sri Lanka-born multi-billionaire Raj Rajaratnam was arrested in the US after he was accused of insider trading there.
The Central Bank said in a statement that investigation was continuing in relation to funding allegedly provided by Rajaratnam to the Tamil Rehabilitation Organisation (TRO), an organization which was involved in relief work on behalf of the Tamil rebels of the Liberation Tigers of Tamil Eelam (LTTE) in thenorthern and eastern parts of the country.
The LTTE was decisively defeated earlier this year by Sri Lankan government forces.
The TRO has been banned in Sri Lanka and their funds were frozen by the Central Bank in 2007.
Rajaratnam is a prominent investor in Sri Lanka as well as the US.
Following reports of his arrest the Sri Lankan stock market, which was improving after the end of the war due to investor confidence, showed a decline which analyst say was linked to the arrest of Rajaratnam.
The market closed 1.63 per cent lower with the All Share Price Index falling 51.6 points to 3,080.75 on Monday.
One of the main companies in which Rajaratnam has 9.2 per cent of the shares suffered heavy losses.
Rajaratnam and three others are accused of making 20 million dollars from illegal trading.
