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PROMOTING FRAUDULENT INVESTMENT SCHEMES MEDIA WARNED TO FACE CONSEQUENCES

Media could also face consequences for promoting fraudulent investment schemes

The Central Bank of Sri Lanka (CBSL) has issued a stern warning to all media organizations in the country, instructing them to immediately cease promoting and publishing advertisements for fraudulent financial and plantation investment schemes that accept deposits from the public without any registration with, or regulation by, the Central Bank.

Media executives and journalists who violate these provisions may face prosecution before the High Court and be subject to severe penalties.Despite repeated warnings and public awareness campaigns by the Central Bank, certain leading media organizations have continued to broadcast promotional programs and interviews featuring unregulated and allegedly fraudulent entities. As a result, many unsuspecting members of the public have reportedly fallen victim to scams and lost substantial sums of money.Consequently, the Central Bank has decided that, going forward, media organizations that provide a platform for fraudulent institutions may also be regarded as accomplices to such offences and be subject to legal action.

The Central Bank’s latest intervention was prompted by an interview broadcast on 8 June on the state-owned television channel Independent Television Network (ITN).

During the program Malwaththage Ranjith Nandana Peiris, a director of Kasagala Green Plantation (Pvt) Ltd, allegedly made a false claim that the company’s plantation investment scheme was regulated by the Central Bank.The Central Bank has since launched a special investigation to determine whether the company has been unlawfully accepting deposits from the public in violation of the Finance Business Act No. 42 of 2011 (FBA).In a letter addressed to the heads of all media organizations, the Governor of the Central Bank cited Sections 49 and 56(4) of the Finance Business Act and outlined the relevant legal requirements.

Under the law, media organizations that publish advertisements for fraudulent schemes in breach of these provisions may face imprisonment of up to five years, a fine of up to Rs. 5 million, or both. In addition, they may be required, under court supervision, to assist in compensating victims for their losses.The Central Bank has further emphasized that, before publishing any advertisement relating to deposits or investment opportunities, media organizations must verify whether the institution concerned appears on the Central Bank’s list of approved entities.