• Allegations of diversion via fake email instructions 
• Finance Ministry appoints probe committee

A USD 2.5 million payment linked to a bilateral agreement between Sri Lanka and Australia has come under scrutiny after it was allegedly diverted through fraudulent email instructions, with lawyers and civil society organisations now urging the Finance Ministry and key State financial agencies to take clear responsibility and ensure a full public account of what happened.

The payment, made between December 2025 and January 2026, was part of an external funding arrangement under an agreement with Australia. The issue came to light after concerns were raised that although the money had been processed, it had not reached its intended recipient.

In a letter dated 22 April addressed to the Speaker of Parliament, the Free Lawyers’ organisation said the disappearance of $ 2.5 million raises serious questions about how financial transactions are handled within State institutions. The group said that it had received information indicating the payment had been released but not received by the intended recipient.

They pointed out that responsibility for public funds ultimately rests with the highest levels of financial administration, including the President and Finance Minister, the Secretary to the Finance Ministry and the Treasury. The letter called for clear disclosure on how the payment moved through the system, who authorised it, and what verification steps were taken before the transfer was made.

If investigations find negligence, gaps in procedure, or any wrongdoing, they said that those responsible should be held accountable under the law. They also warned that weaknesses in verification systems could expose public funds to serious risk if not addressed properly.

A separate statement issued by the Dinana Dakuna organisation on the same day also stated the disappearance of such a large sum highlights the need for greater clarity in how international financial transactions are managed. The group urged the Government to explain step by step what happened from the time the payment was initiated until it went missing.

Meanwhile, the Finance, Planning, and Economic Development Ministry has appointed a Technical Investigation Committee to look into the matter urgently.

An official letter from the Ministry read the committee was formed following a memorandum from the Director General (DG) of External Resources dated 24 March 2026, which reported suspected fraudulent email communications and the missing $ 2.5 million linked to the Australian agreement. The committee is co-chaired by Deputy Secretaries to the Treasury A.N. Hapugala and S.S. Mudalige. Other members include the DG of the National Planning Department K.T.I. Premarathna, the Additional DG of the Legal Affairs Department A.K.D.D.D. Arandara, and the Assistant Director of the Information Technology Management Department E.D. Siriarathna, who will act as the convenor. The Ministry has asked the committee to carry out the inquiry without delay and submit its findings as soon as possible.

However, both the lawyers’ group and civil society representatives have said that the investigation should be handled by an independent body such as the National Audit Office, or a team outside the Finance Ministry’s control. They further called for additional scrutiny through a Committee on Public Enterprises inquiry, a review by the Central Bank, and an investigation by the Government Debt Management Office.

Attempts to contact the Finance Ministry and Treasury Secretary, Dr. Harshana Sooriyapperuma proved futile.