• 2 PDMO, 2 ERD officials removed pending disciplinary inquiry
• CID, CBSL FIU, SLCERT join cross-border investigation

The Government has suspended four senior officials of the Ministry of Finance – two from the Public Debt Management Office (PDMO) and two from the External Resources Department (ERD) – pending a disciplinary inquiry into a cyber fraud that resulted in the diversion of $ 2.5 million.

The funds had been allocated for an external debt repayment to an Australian creditor.

According to preliminary findings, the payment had been redirected after unauthorised access had been gained to the email system of the ERD. 

The incident is now under investigation by multiple agencies, including the Criminal Investigation Department (CID), with support from international counterparts.

Treasury Deputy Secretary Ananda Kithsiri Seneviratne confirmed the positions of those suspended.

“The suspended officials include one Additional Director General and one Director from the PDMO, as well as one Director and one Assistant Director from the External Resources Department,” he said.

He added that the suspensions would remain in effect until the conclusion of the inquiry.

“The duration will depend on the process and a disciplinary inquirer has already been appointed. The inquiry is expected to take some time,” he told The Sunday Morning.

The incident has raised concerns regarding financial controls within the Treasury, particularly in the context of Sri Lanka’s ongoing debt management process. However, officials maintain that the country’s external obligations remain unaffected.

Treasury Secretary Dr. Harshana Suriyapperuma said that the matter had been reviewed in the context of debt servicing commitments.

“We examined whether this situation could be considered a technical default. Based on advice received, Sri Lanka has demonstrated both the capacity and the intention to service its debt by initiating the payment. The diversion occurred due to the actions of third parties. We are also engaging with the relevant creditor in good faith. On that basis, we have been advised that this does not constitute a technical default,” he said.

Investigations are being coordinated by the CID following complaints lodged by the Ministry of Finance. The Financial Intelligence Unit (FIU) of the Central Bank of Sri Lanka (CBSL) and the Sri Lanka Computer Emergency Readiness Team (Sri Lanka CERT) have also been engaged to trace the transaction and identify those responsible. 

Authorities are working with Australian counterparts, as the funds were routed through a bank account in Australia.

The Australian High Commission in Colombo has acknowledged the issue and is facilitating coordination between the two countries. Australian authorities have also indicated their awareness of the payment irregularity involving their export credit agency.

The Ministry of Finance said that, alongside the ongoing investigations, steps were being taken to strengthen internal systems and prevent similar incidents. The outcome of the disciplinary inquiry will determine any further administrative action against the suspended officials.