Finance Probe

July 05, 2007 (LBO) – A presidential commission of inquiry probing the collapse of a string of finance companies in Sri Lanka has begun questioning Central Bank officials. The four-member commission comprising of senior legal and finance experts commenced sittings on July 2 and will hold its next sessions on July 6 and 13. The commission said in a statement Thursday the present director of the Central Bank's Department of Supervision of Non-Bank Financial Institutions was the first to testify before it.

Part of the commission's mandate is to make recommendations for action to be taken against directors of failed finance companies for mismanagement and misappropriation of funds.

It has also been tasked with trying to recover loans given to the firms by the Central Bank during 1991-2005 and examine the conduct of Central Bank officials who had been in charge of regulating them.

The commission also has to recommend action against government officials responsible for lapses in supervising the failed finance firms.

The collapse of the finance companies caused heavy losses among the investing public and led to some loss of confidence in the markets regulat