-By LeN Financial Corrospondent
(Lanka-e-News - 13.Sep.2025, 11.30 PM) On 4th May 2011, Lanka Oryx Finance Company Ltd., a licensed finance company and a publicly listed entity, approved a loan of Rs 50 million to Carlton Sport Network (CSN), a little-known media outfit that would soon come under public scrutiny. More than a decade later, questions remain unanswered: was this a legitimate commercial transaction, or a loan forced through under the weight of political pressure from the highest office in the land?
At the time, Lanka Orix Finance operated under the strict licensing framework of the Central Bank of Sri Lanka, with obligations not only to its shareholders but also to the investing public. Granting a loan of such magnitude – at an interest rate of 17% over 60 months – should, in theory, have been subject to rigorous due diligence. Yet, insiders now whisper of “irregular approvals,” “extraordinary guarantees,” and the looming shadow of then-President Mahinda Rajapaksa, whose family was directly associated with Carlton Sport Network.
Under Central Bank regulations, licensed finance companies are required to assess the borrower’s financial health, collateral, and repayment capacity before approving loans of significant value. Whether CSN presented sufficient documentation to justify a Rs 50 million borrowing remains opaque. Were audited financial statements supplied? Did directors sign off after full deliberation? Or were internal processes overridden?
“These are not minor questions,” says one former Central Bank official, speaking on condition of anonymity. “When a listed company grants a facility of this size, it must document the rationale. If those papers don’t exist, or if they show undue political influence, that’s a regulatory breach.”
The trail grows murkier when one asks whether the loan was in fact repaid in full. If it was, some argue, the company might claim the issue is closed. But governance experts disagree.
“This isn’t only about whether the cheque cleared,” says a Colombo-based financial analyst. “The issue is whether the loan should have been granted at all. A listed company has a fiduciary duty to act independently. If the decision was made under political pressure, it amounts to abuse of its licence.”
The timing is notable. In 2011, Mahinda Rajapaksa was at the height of his power, with family members embedded across the political, business, and media landscape. Carlton Sport Network, widely perceived as a Rajapaksa-linked venture, was eager to expand its broadcasting footprint. Access to capital was essential – and few commercial lenders would have taken such a risk without collateral or political protection.
The suggestion that Lanka Orix was “nudged” into releasing funds will now test the credibility of the NPP government’s anti-corruption agenda. If political pressure was applied, the loan represents not only financial irregularity but also an abuse of the regulatory system meant to protect public trust in licensed finance companies.
Even if Carlton Sport Network met its repayment obligations, that does not absolve Lanka Orix of responsibility. Listed companies are bound by disclosure requirements. Transactions of this scale must be transparent to regulators, shareholders, and tax authorities.
The Inland Revenue Department too has grounds to investigate. What income declarations did CSN file at the time? Were tax obligations honoured on the borrowed funds? And did the repayment structure match the terms of the loan agreement?
If the documents reveal undue influence, financial penalties could be severe. Shareholders may also have grounds for legal action if it is shown that Lanka Orix acted in bad faith or outside its mandate.
This case is emblematic of a wider concern: how corporate governance collapses under political pressure. The Central Bank now faces a test of its regulatory will. Was Lanka Orix acting as an independent finance company, or as a financial arm bent to the will of political power?
The NPP government has promised to break from the culture of impunity. This loan is a live test. To investigate thoroughly is to affirm the rule of law; to ignore it is to signal continuity with the past.
For investors and the wider business community, the message matters. As one corporate lawyer puts it: “If a listed company can be compelled to lend Rs 50 million to a politically connected borrower without consequence, then Sri Lanka’s financial markets are not free – they are captive.”
The loan may have been signed on 4th May 2011, but its shadow stretches long into the present.
-By LeN Financial Corrospondent
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