By: Staff Writer
September 24, Colombo (LNW): Sri Lanka’s growing problem of fraudulent plantation investment schemes has exposed a dangerous gap between attractive investment promises and the legal protections actually available to members of the public, with the Central Bank warning that unrealistic returns can conceal unlawful deposit-taking operations.
The issue came into sharp focus following remarks by Central Bank Governor Dr. P. Nandalal Weerasinghe at the 172nd Annual General Meeting of The Planters’ Association of Ceylon in Colombo.
Dr. Weerasinghe said the plantation sector’s reputation had been increasingly exploited through fraudulent investment proposals involving illegal deposit-taking. These schemes, he said, promise unrealistically high returns over short periods and can ultimately result in the loss of the public’s hard-earned savings.
The warning assumes greater significance following the CBSL’s latest enforcement action against six companies and their directors.
According to the Central Bank, freezing orders have been issued against Kasagala Green Plantation (Private) Limited, Ceylon Green Life Plantation (Private) Limited, Singhe Capital Investment Limited, Pro Shop Advertising Holdings (Private) Limited, Athens International Education Centre (Private) Limited and Eyon Lanka Investment & Film Production International Company (Private) Limited.
The orders prevent the companies and directors from disposing of, transferring or otherwise dealing with their properties and other assets.
The orders were made under Section 44 of the Finance Business Act No. 42 of 2011 and have subsequently been confirmed and extended by the Colombo High Court, giving the regulatory action a significant legal dimension.
The Central Bank is separately investigating Kasagala Green Plantation and Ceylon Green Life Plantation under Section 42 of the Act. In relation to the other four companies, CBSL has already determined that they had carried on finance business and/or accepted deposits contrary to Section 2.
The central concern is the collection of money from the public without the safeguards attached to licensed financial institutions.
CBSL has repeatedly stressed that members of the public should place deposits only with institutions legally authorised to accept them. Such institutions must be licensed under the Banking Act or Finance Business Act, unless specifically exempted by law.
The plantation-investment controversy also exposes a broader vulnerability in Sri Lanka’s investment environment: the ability of schemes to exploit the public appeal of tangible assets such as land, trees and agricultural production while offering financial returns that may appear disconnected from realistic commercial performance.
The absence of deposit insurance and other protections in unlawful schemes means investors can face the possibility of losing their entire capital.
The implications extend to the legitimate plantation industry as well. The Planters’ Association has cautioned that fraudulent operations can undermine public confidence in genuine plantation businesses that have operated within established commercial and regulatory frameworks.
CBSL has now disclosed that investigations are continuing into several other institutions and individuals following complaints regarding possible unauthorised finance businesses and deposit-taking.
The latest action therefore represents more than an investigation into individual companies. It is a warning to investors that a plantation label, attractive monthly payout or spectacular promised return does not by itself establish the legality or financial soundness of an investment opportunity.