-By A Special Correspondent
(Lanka-e-News -03.June.2025, 10.30 PM) In what appears to be one of the most brazen manipulations of Sri Lanka’s stock market since the infamous bond scam, new revelations expose how businessman Dilith Jayaweera allegedly orchestrated a series of insider dealings that converted investor funds into personal profit — all under the noses of regulatory authorities.
According to a confidential dossier obtained by this newspaper, Citrus Leisure PLC, under Jayaweera’s control, transferred Rs. 1.4 billion to its sister company Citrus Kalpitiya Pvt Ltd — ostensibly as an investment. However, the funds were never utilised for Kalpitiya’s development. Instead, the money was used as collateral to finance a speculative and unethical trade benefiting Emage Wise Pvt Ltd, another company owned by Jayaweera.
On 20 May 2011, Emage Wise used the Citrus Kalpitiya funds to acquire 18 million shares of Colombo Land & Development Company PLC (CLDC) at Rs. 20 per share on credit — a total value of Rs. 3.6 billion. Because of a seven-day grace period permitted by the Securities and Exchange Commission (SEC) for credit settlements, no actual payment was made upfront.
What followed was a rapid fire-sale of select shares to close associates. A total of 3.8 million shares were offloaded to one Murad Ismail — an interior designer with no known investment background but a close associate of Jayaweera — at Rs. 38.50 per share, yielding an instant paper profit of over Rs. 138 million for Jayaweera.
Then, in a series of incestuous internal transactions, on 2 June 2011, Emage Wise sold the same shares back to Citrus Kalpitiya (the company that originally provided the funds) at Rs. 43.50 per share, generating yet another profit of Rs. 412 million — all routed into Jayaweera’s accounts.
Murad Ismail too played his part in the whirlwind: acquiring shares from Emage Wise on 25 May and flipping them by 7 June at Rs. 44 per share, profiting Rs. 20.9 million in just seven days. The entire charade resembled a tightly scripted pump-and-dump operation.
By July 2011, the full circle was complete. The same shares bought on credit for Rs. 20 were sold back to the originating company (Citrus Kalpitiya) at more than double the price. Jayaweera walked away with Rs. 432 million in profits, effectively siphoning off funds meant for actual investment in Kalpitiya’s tourism infrastructure. The investors, meanwhile, were left holding empty promises.
Following the scheme, Jayaweera tightened his grip on CLDC, acquiring a 24% stake and installing his handpicked chairman Nalaka Godahewa — a name that would later appear in the Rajapaksa government's inner circle as a minister, known mockingly in local circles as Nalaka Kasbahewa.
Board appointments at CLDC included not just Jayaweera himself, but also U.M.M. Ali Sabry (not to be confused with the current Foreign Minister), C.K.M. Deheragoda, and other allies.
The Securities and Exchange Commission (SEC), then headed by Indrani Sugathadasa, launched an investigation into the suspicious dealings. But sources reveal Jayaweera wielded considerable political and financial influence to stall the probe.
Eventually, Sugathadasa stepped down, replaced by Tilak Karunaratne, a respected regulator known for his integrity. Karunaratne reopened the investigation, uncovering not only the Rs. 432 million profit but further revelations indicating that Jayaweera had siphoned off over Rs. 3 billion from the stock market through dubious schemes.
The scale of this manipulation, investigators concluded, rivalled the infamous Central Bank bond scam in both audacity and damage to public trust.
In August 2012, Karunaratne formally forwarded case file SEC/INV/18/10/241 to the Attorney General’s Department, recommending prosecution under securities fraud and insider trading laws. But once again, the system buckled.
The file landed on the desk of Dilip Peiris, a senior legal officer, whose phone records allegedly show frequent contact with Jayaweera himself, casting doubt on the impartiality of the AG's review. No charges were filed. Instead, Karunaratne, under intense political pressure, was forced to resign on 17 August 2012.
In a final twist of irony, the man appointed to replace him as SEC Chairman was none other than Nalaka Godahewa — the very individual who had personally benefited from Jayaweera’s transactions and chaired the company involved.
Today, the key to reopening this case lies buried in bureaucratic silence: SEC/INV/18/10/241 — the file Karunaratne forwarded to the Attorney General, believed to still reside, untouched, within the corridors of Colombo’s legal system.
If ever revived, it could serve as the basis for one of Sri Lanka’s most explosive white-collar prosecutions — one that unearths how political power, media ownership, and financial markets became tools in the hands of a select few.
Jayaweera is often hailed in local media as a “visionary entrepreneur” and a “self-made success story.” But critics argue his rise mirrors not the virtues of capitalism — but the vices of cronyism, regulatory capture, and systemic fraud.
From Emage Wise to Citrus Kalpitiya, from Colombo Land to Godahewa’s appointments, every step of the puzzle reveals a choreography designed to enrich one man — at the expense of thousands of honest investors.
As the dust settles, one can only wonder: How much longer will Sri Lanka’s regulators turn a blind eye? Or will this, like so many other scandals, fade into oblivion — with the perpetrators basking in ill-gotten glory?
-By A Special Correspondent
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by (2025-06-03 16:55:26)
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