Bank accounts of 28 PTL companies frozen

Central Bank's Financial Intelligence Unit takes urgent steps to prevent money laundering

The operations of bank accounts of all 28 companies within the Perpetual Group-- associated with Arjun Aloysius, a key suspect in the controversial Central Bank bond scams— have been frozen with immediate effect by the Financial Intelligence Unit ( FIU) of the Central Bank of Sri Lanka (CBSL), authoritative sources told the Sunday Times.

The directive was issued on Wednesday to banks in which the accounts reside and was pursuant to available “intelligence” that Perpetual, beneficiary of questionable bond trans- actions that are under investigation, was taking steps to siphon funds. The suspension means that none of the 28 companies within the group can carry out financial business of any sort through their bank accounts.

The authorities will now begin vetting each of the accounts so that the suspen- sion could be eased to facilitate the group’s routine activities such as payment of salaries to employees. Lawful transactions will be permitted, the sources said, adding that the action taken this week was an urgent move to prevent money laundering.

Among the companies in the group are Perpetual Treasuries ( Pvt) Ltd, Perpetual Asset Manag ement ( Pvt) Ltd, Perpetual Capital Holdings (Pvt) Ltd, W M Mendis & Co Ltd and Integrated Media Networks (Pvt) Ltd. The concern also has large shareholdings in various other listed entities.

The fresh order supplements an earlier Monetary Board directive freezing PTL's two accounts that were maintained to trade in Government treasury bonds. Those assets amount to a total of Rs 12.5bn, including Rs 7.5bn in cash and the rest in securities. The company’s effort to have that sus- pension overturned by court was unsuccessful.

TheFIU implements anti- money laundering regulations and administers the provisions of the Financial Transactions Reporting Act. Its order this week has a wider ambit than the Monetary Board action which caused a suspension of trading in both the primary and secondary markets of treasury bonds by PTL. The FIU order suspended all debit transactions-- withdrawals or transferring out of monies-- of all accounts of the entire Perpetual Group.

The CBSL issued a media statement explaining the November 2016 directions of the Monetary Board. It said PTL’s levels of operation in the primary and secondary market were curtailed and that the alienation of funds was prevented.

Further directions were issued from time to time, it said. The company’s business activities are suspended and PTL is prevented from the disposal of assets, distribution of profits and making payments without the prior approval of CBSL till July 6, 2018. The Securities and Exchange Commission was also requested to take appropriate action with regard to PTL assets coming under its purview.

The regulator is yet to issue a statement on the latest developments.