Protests in Sri Lanka Ponzi capital

Sept 26, 2008 (LBO) – Protests erupted against authorities in a sleepy Sri Lankan fishing village which can almost lay claim to be the Ponzi capital of the world, after a financier in the area was blacklisted as running an illegal business, police and residents said. The Central Bank of Sri Lanka named Piyadasa Ratnayake, a financier in Hungama in Southern Sri Lanka popularly known by the alias Danduwam Mudalali or the ‘punishment businessman.’

Residents say he had acquired the name in his school-going days when the naughty young Ratnayake was repeatedly punished by his teachers.

‘Danduwam Mudalali’ had originally started lending money to small fish retailers at high interest rates, charging daily interest rates to become prosperous.

Danduwam Benchmark

Later on, he had started getting money from others and re-lending, paying 7 percent a month ‘interest’ for his ‘depositors’. By this time nobody knew where his money was being ‘invested’ to pay such a high return.

But people were coming from all parts of the island and giving him money to get 7 percent interest which is annualized at around 90 percent.

Along with Ratnayake, the Central Bank also named five other businesses as carrying on illegal finance businesses. One of t