The Central Bank of Sri Lanka (CBSL) has launched investigations into multiple complaints regarding the collection of cash deposits for plantation investment projects. Among the institutions under scrutiny is Pintanna Plantations Pvt Ltd, owned by Kumar Dharmasena, a former Sri Lankan national cricketer and an international cricket umpire. This move comes as CBSL disclosed information about institutions accepting deposits from the public primarily for agricultural investments, potentially contravening banking regulations.
CBSL’s Investigation
CBSL’s Assistant Governor, K.G.P Sirikumara, clarified that accepting public deposits without proper authorization constitutes a criminal offence. He emphasized that only institutions authorized by CBSL under the Banking Act or the Finance Business Act can legally accept deposits. Other entities, not regulated by these Acts, are prohibited from such activities.
Sanjaya Mahawatta, Chairman of “Magen Ratata”, and Lasitha Lakmal have submitted a formal complaint to the Central Bank Governor, urging a thorough investigation into Pintanna Plantations’ deposit practices. The CBSL responded by acknowledging the complaint and confirming that Pintanna Plantations is not authorized under relevant financial regulations to accept public deposits.
CBSL’s Official Statement
In a letter dated May 6, 2024, CBSL stated: “We hereby inform you that Pintanna Plantations Pvt Ltd is not authorised under the Banking Act No. 30 of 1988 or the Finance Business Act No. 42 of 2011 to engage in finance businesses by taking deposits from the public, nor under the Microfinance Act No. 6 of 2016 to engage in microfinance activities. Additionally, it is not licensed under the Finance Leasing Act No. 56 of 2000 to engage in leasing businesses, nor is it licensed by the Central Bank of Sri Lanka, nor is it exempted from the provisions of the said Acts. Accordingly, the said institution is not an institution subject to the regulation or investigation of the Central Bank of Sri Lanka.”
Pintanna Plantations’ Perspective
A representative from Pintanna Plantations Pvt Ltd provided details about their agarwood plantation project. Registered under the Companies Act No. 07 of 2007 with registration number PV 00223817, the company received 37.169 million rupees from the World Bank in 2020 to initiate agarwood production. The project involved constructing a factory for agarwood products, under the guidance of Kumar Dharmasena, the chairman, with his family members serving as the board of directors.
Pintanna Plantations was established in 2009 and claims to cultivate 400 agarwood plants per acre, with each plant harvestable after 8-10 years. As of March 31, 2023, the company had 110,000 agarwood saplings and trees, 15,000 of which are suitable for cutting. The company boasts 500 employees and assets valued at 8.5 billion rupees. Their investor base has grown from 4,000 to 6,000.
The Core Issue
The crux of the issue lies in the method Pintanna Plantations used to attract investments. While they claim legitimacy through substantial investments and a significant number of trees planted, the acceptance of public deposits without proper authorization has raised serious concerns. This regulatory scrutiny aims to protect the public from potential financial mismanagement and ensure that all financial activities comply with national regulations.
Conclusion
The Central Bank’s investigation into Pintanna Plantations Pvt Ltd underscores the importance of adhering to financial regulations when accepting public deposits. While the company has made significant strides in the agarwood industry, it must navigate the regulatory framework to maintain its legitimacy. As the investigation unfolds, the outcome will determine the future of Dharmasena’s ambitious agarwood project and its compliance with Sri Lankan financial laws.
