Colombo Chief Magistrate Asanga S Bodaragama has directed the Financial Crimes Investigation Division (FCID) to investigate allegations involving the illegal transfer of approximately US$1 billion overseas, purportedly under the pretext of import transactions. The inquiry focuses on verifying export activities connected to advance payments made from Sri Lankan banks to overseas exporters.
The order follows a petition submitted by defense counsel M M Zuhair PC on behalf of Jiffry Mohamed, a key suspect linked to A Y Investments Impex Pvt Ltd. Mohamed and his legal team maintain that a thorough, impartial investigation is necessary as police allegations claim that substantial sums were sent abroad by 89 Sri Lankan companies for imports that never materialized.
According to the defense, the overseas exporters, based in countries including China and India, did in fact ship goods to Sri Lanka, which were received and cleared by respective importers. They argue that it is essential for authorities to examine the flow of funds from the banks to determine the legitimacy of these transactions.
Counsel Zuhair, appearing alongside Asanga Perera and Sanjay Perera, stated in court that neither Mohamed nor his 34 associated companies acted as importers. Instead, A Y Investments provided operational services for a nominal commission, processing rupee-denominated funds received from brokers and facilitating their conversion into foreign currency by banks, which then remitted the amounts to exporters. The defense argued it would be illogical for any importer in Sri Lanka to remit large advance payments overseas without receiving the corresponding goods.
Further, the defense highlighted that FCID has yet to submit findings regarding 55 of the total 89 companies involved in the case, with reporting so far limited to Mohamed’s associated entities.
The defense also cited the Special Import License and Payment Regulations No 1 of 2011, established under the Import and Export (Control) Act and supported by Article 44 of the Constitution, which permit advance payments for import transactions. These regulations, amended in June 2026, remain in force. Counsel stated that police reports had not referenced these legal provisions, which, they contend, legitimise the advance payments made.
Meanwhile, legal representatives for four arrested bank employees argued that the individuals were junior staff members who had not engaged in any criminal activity and requested bail.
The case is set for further hearing on September 3.