A major corporate fraud scandal has erupted in Sri Lanka’s agribusiness sector, following the formal complaint filed by Sheran De Fonseka, a director and shareholder of SMSS Holdings (Private) Limited. The complaint, lodged with the Criminal Investigation Department (CID), accuses two former directors, Vijayasekerage Shanika Kumari and Herath Bandaralage Anuradha Oshadha Herath, of embezzling over Rs. 30 million through a sophisticated scheme of falsified financial reports and unauthorized fund transfers.
The allegations stem from an initial investment by De Fonseka and his brother, Antony, in 2023, resulting in them acquiring a 70% stake in the newly rebranded SMSS Holdings. Kumari and Herath were entrusted with daily operations and joint signing authority for bank accounts. For months, investors were misled by fabricated monthly reports that showed substantial profitability, prompting further capital injections for fertilizer imports.
The fraud was exposed in October 2024 when Kumari proposed a resolution for an independent cheque-signing authority, raising immediate suspicion. A subsequent forensic audit, completed in January 2025, revealed extensive misconduct, including the direct transfer of Rs. 31.46 million to the personal accounts of the accused. The audit identified Kumari as the primary perpetrator, having individually siphoned Rs. 28.33 million, while Herath took Rs. 1.48 million.
The audit also uncovered negligence resulting in Rs. 4.73 million in late fees and a staggering Rs. 14.43 million VAT liability due to the improper classification of imports. Both individuals allegedly admitted to the fraud during a staff meeting but failed to honour promises of repayment.
Intelligence suggests that the former directors have launched a rival entity, Sayara Holdings Lanka (Private) Limited, possibly utilizing the misappropriated funds, which De Fonseka claims constitutes money laundering.
In a dramatic turn, Anuradha Oshadha Herath was arrested last night by authorities while attempting to flee the country, intensifying the ongoing CID investigation.
De Fonseka, who has submitted the forensic audit and bank statements as evidence, stated, “We firmly believe that their acts are criminal in nature and attract penal liability under the laws of Sri Lanka.” The investigation is ongoing, casting a spotlight on vulnerabilities within the nation’s burgeoning agribusiness industry.
