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Beware Of The Lion’s Den

By The Third Eye

Forex trading by an unregistered entity is a punishable offence under the exchange control act

Lion Sight Treasury Ltd which is said to be a fund management company based in Sri Lanka, is alleged to have approached high net-worth individuals in Japan with the expectation of soliciting funds, offering them a guaranteed return of 20% after the second year of investment.

Lion Sight Treasury, Lion Sight Forex Trading and Lion Sight Holdings Limited are three companies that are said to be projects under the Board of Investment (BOI).

However, highly reliable officials attached to the Investment Division of the BOI said that of the three companies, the BOI has signed agreements only with two companies but not with the third.

“In the event we find out that any company is misleading the people stating that they are a BOI project, we can take action. We have to go through our reports and find out which company has not taken BOI approval,” the sources said.

According to sources, they have received approval for the monorail project in Sri Lanka and had got a land in front of a proposed monorail station in Colombo to build a hotel project. According to them, they are the first to introduce a monorail system in in the South Asian region under Japanese technology.

Reliable Sri Lankan sources living in Japan told The Sunday Leader that Chairman Lion Sight Treasury Mr. Morisaki has allegedly approached high net-worth individuals in Japan claiming that he was an advisor to the former Transport Minister Ranjith Madduma Bandara and obtained approval to initiate the monorail project with an estimated cost of US$ 750 million.

“By saying so, he asks the high net-worth individuals in Japan to invest in the project promising a return of 20% of the initial investment within two years of the investment,” the officials said.

However, Minister Ranjith Madduma Bandara when contacted said that he had a Japanese advisor for a short period when he was the Transport Minister last year but added that he has never given any approval to any party to start a monorail project in the country.

The Sri Lankan community in Japan meanwhile had written to the Governor of the Central Bank to verify the credibility of this company claiming that knowing the business atmosphere in the country, finding a company that promises such a high return for investors is surprising.

“As I am quite familiar with the business atmosphere in Sri Lanka, I believe that this rate of return is relatively high compared to the other market participants and as such, is very attractive to investors. I would be keen to promote such a company in Sri Lanka to my network of clients and investors in the event that the information I have received is viable,” the letter to the Central Bank read.

The Sri Lankan sources meanwhile stated that they want to clarify with the Central Bank of Sri Lanka (CBSL) whether Lion Sight Treasury and Lion Sight Forex Trading are registered companies with the Central Bank or any other government body as a Fund Management/Foreign Exchange trader respectively.

“We want to find out whether these companies are BOI approved institutions as stated by them in their website. Their website also states that they are interested in a transportation project in Sri Lanka- the Central Colombo Transport Hub and Monorail Project. On the company’s website it states that the ‘company is proud to introduce the Central Colombo Transport Hub and Monorail Project’ and that the estimated budget for the project stands at US $ 1.95 Billion,” sources said.

However, when contacted, Additional Secretary, Transport Ministry, Thilakaratne Banda said that many entities have put forward various proposals regarding the matter, but the Ministry of Transport has not yet entertained any such proposals. He further stressed that many private parties have expressed interest in the matter and had provided various proposals to the Ministry, but he is unaware as to whether any of the parties were given the nod by the Ministry.

CBSL stance on illegal Forex

The Central Bank of Sri Lanka has expressed displeasure regarding false entities trying to lure investors under false pretences.
According to the Central Bank, some companies and proprietary concerns have even engaged their employees or agents to personally contact members of the public to entice them to undertake Forex trading with promises of exorbitant returns. These agents and the advertisements on the Internet and in the print and electronic media encourage people to trade in foreign exchange, depositing an initial investment in Sri Lankan rupees with a company, proprietorship concern or individual in Sri Lanka to be transferred later into an online account or, payment through credit, debit or any other electronic funds transfer card direct to an online account opened in the name of the investor.

“The Central Bank in the recent past has come across instances where several persons have lost large sums of monies due to the above activities carried out by unscrupulous individuals and companies. Central Bank wishes to inform the general public that undertaking foreign exchange trading transactions and remitting payments outside Sri Lanka for such transactions by any person without the approval of the Central Bank is illegal and a violation of the provisions of Section 5(1) and 7(a) of the Exchange Control Act. This is considered a punishable offence under the Exchange Control Act and we request the general public not to fall prey to such transactions,” states the CBSL.

Meanwhile, Governor of the Central Bank, Arjuna Mahendran said that no company can solicit funds under false pretences. In any case, if any entity is identified, they will be prosecuted to the fullest extent of the law.

Lion Sight Company’s profile states that it is geared to provide infrastructure development facilities with the aid of the BOI, and State Ministries of the Government.  It also states that principally, the projects are related to the transport sector, rehabilitation of the Beira Lake, the second runway and the terminal at Negombo lagoon and agriculture and industrial training centres in collaboration with the Ministry of Agriculture.

When contacted, Chief Executive Officer (CEO) of Lion Sight Treasury at Level 4, West Tower, World Trade Centre, Colombo 1, Upali Keppetipola said he was not willing to make any comment about the companies.

“Why should I tell you about these companies? This is not the first time your paper has come after me. Your former Editor contacted me about 15 years ago when I was in England. Please don’t ask anything about this company as I am not ready to make any comment,” Keppetipola said.

 

3 Comments for “Beware Of The Lion’s Den”

  1. H.L. Vanstraten

    I endorse your paper in sounding the alarm on this matter. Kettetipola’s reaction tells it all.

  2. gabriella

    In the current low interest environment, a twenty percent return on investment (ROI)
    should sound warning bells immediately. Anyone who falls for this deserves to be taken advantage of.

    I would have thought everybody would have learnt from recent experience. If they haven’t then they deserve the consequences.

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