The NDB fraud case saw Colombo’s Chief Magistrate question audit failures after lawyers said the bank lost Rs. 13.9 billion.
The NDB fraud case involving more than Rs. 13 billion allegedly siphoned through the public ledger account of a prominent private bank was taken up before the Colombo Chief Magistrate’s Court today (26). During the hearing, Colombo Chief Magistrate Asanga S. Bodaragama sharply questioned the bank’s internal procedures and apparent audit failures.
The lawyer appearing for the bank informed court that the financial fraud had caused the bank a massive loss amounting to Rs. 13.9 billion.
Issues That Drew the Magistrate’s Attention
The Chief Magistrate directly questioned the bank’s lawyer about the institution’s audit process and whether warning signs had been detected.
“During the 2023/2024 period, did the audit reports conducted by the bank reveal any outflow of funds from the bank in this manner? Was there any disclosure regarding a person within the bank taking money from the bank’s public ledger account, making some other investment, and then redepositing it in the bank’s public ledger?”
In response, the lawyer stated that no such disclosure had been made. Following that answer, the Magistrate made strong observations in court.
“It has been stated that the Rs. 380 million allegedly transferred last was transferred within a single day. Hadn’t such large amounts been transferred before? Wasn’t there an audit cycle system regarding that?
“Because when money goes missing from the home cupboard, the person in charge of money at home knows about it. When money in the bank goes missing, don’t the bank officials deployed for that purpose know about it? When money in the bank’s public ledger account increases, don’t the officials concerned know about it? When money is lost, the owner should know. There is a process for that, but it has not been implemented in the bank.”
Court Orders and Case Progress
Suspects Remanded: Considering a request made by the Criminal Investigation Department (CID), the Magistrate ordered that the four suspects in the case be further remanded until the 10th.
Bail Granted: The court ordered that the fifth suspect in the case be released on bail.
Next Hearing Date: The case is scheduled to be called again on the 10th, with the court directing that the progress of the investigation be submitted on that date.
CID Investigation Continues
The CID revealed several facts to court regarding the progress of the ongoing investigations.
The court was informed that extensive investigations are currently being carried out into another 19 accounts linked to the incident. Investigators are also examining funds allegedly transferred abroad through suspense accounts.
Further investigations are also continuing into bank officials who were directly or indirectly involved in the alleged fraud.
At the previous hearing, the Computer Investigation Unit of the Criminal Investigation Department informed court that neither the internal and external audits conducted within the bank, nor the audit reports carried out by the Central Bank of Sri Lanka, had included an audit of the payments and settlements section connected to this issue.
