Suspects who struck it rich in the VAT refund scam have illegally sent out vast sums of money for investment abroad, ongoing CID investigations have revealed.
One suspect, S. Subramaniam, described as a textile tycoon had allegedly invested large sums of money in Uganda and Vietnam. It was revealed earlier that he had purchased a Rs. 100 million house in Trichy, South India.
Due to questions arising from Subramaniam`s operations in Uganda, the Ugandan government appointed a special fact-finding committee to probe into his businesses in Colombo. The Ugandan team sent to Sri Lanka went back empty-handed as the Central Bank reportedly did not make a great effort to co-operate with the Ugandan team.
Another suspect, Kamil Kuthubdeen, described as a kingpin of the racket, is alleged to have illegally remitted funds for investment in Singapore, Australia and Malaysia. Earlier it was revealed that he had purchased a three star hotel in Dubai with funds he had allegedly obtained through VAT refunds on non-existent companies.
The probe into the scam had also revealed that the suspect Rasheed Murshid who is evading arrest purchased a mansion in Malaysia. It is believed he had also illegally sent the money abroad when making the investment for the purchase.
Former Deputy Commissioner of the Inland Revenue Department VAT refund division Z. Jayathilake who was the first person to be nabbed in the VAT fraud had reportedly invested his money in Australia as well as in Singapore.
Before Jayatilake came back to Sri Lanka he is said to have spent 18 days in Singapore in a flat which was bought with funds fraudulently obtained. The CID has found that the Central Bank has no records of him being sanctioned to remit money to purchase properties abroad.
The Rs.3.57 billion VAT scam came into light when the Auditor General discovered a deficit of a vast sum of money in the Inland Revenue VAT refund division. The investigation which was handed over to the CID made a breakthrough when Jayatilake who was visiting Sri Lanka was nabbed. According to detectives Jayatilake had gone to New Zealand when the audit queries were first raised. So far five suspects have been arrested while the CID is still trying to locate the rest of the culprits of this massive scam.CID detectives are now awaiting information from Interpol Headquarters in Leon, France to help formulate a full account of the illegal investments abroad. This is a prelude to investigators making contact with their counterparts in those countries prior to visiting them.
According to investigations there was no record of any money transfers by the suspects. A Central Bank official who could help detectives with further information is said to be absconding. In a few instances, however, recipients of illegal funds had obtained Central Bank approval to remit the money abroad. They are now to be questioned as to how they acquired the money.