Monday, October 19, 2009
Colombo Stock Exchange crash by Arrest of billionaire Raj Rajaratnam
Arrest of world’s richest Sri Lankan, billionaire Raj Rajaratnam felt in Sri Lanka with the Colombo Stock Exchange crash. The Colombo Stock Exchange (CSE) on Monday(19th,Oct 2009) witnessed the biggest fall in the last five years, following the arrest of the Sri Lanka-born New York hedge fund billionaire, Raj Rajaratnam, on charges of “vast insider trading.”
The Central Bank of Sri Lanka (CBSL), however, said the investigations into the Galleon Group hedge fund founder were inconclusive and urged observers and analysts not to jump to conclusions.
Mr. Rajaratnam is the richest Sri Lanka-born U.S. citizen and his firm has a stake in all of the 10 top listed Sri Lankan companies.
He was the icon of rich and powerful in Sri Lanka. Lankan government vowed to investigate the Wharton Business School-educated Rajaratnam’s LTTE links in a witch-hunt.
The Sri Lankan business circles were worried for the conversations about the implications of his arrest on the hundreds of millions of dollars that Rajaratnam had invested in Sri Lanka since 2003, a year after the government signed a truce with the LTTE.
With an estimated return of over 108 per cent so far in 2009, the CSE was the second best performing bourse in the world before the jolt.
Mr. Rajaratnam (52) was among six persons arrested on Friday by the U.S. authorities.
The CBSL in a statement here said, “Investigations are yet continuing in relation to the funding allegedly provided by Raj Rajaratnam to the Tamil Rehabilitation Organisation (TRO). Accordingly, any reports that suggest that such investigations are concluded or that Mr. Rajaratnam has been cleared of possible involvement are incorrect and misleading.”
A report on the Sri Lankan Presidential website has said that Mr. Rajaratnam is one of the wealthiest men in America with an estimated net worth of $1.3 billion and he was a major contributor to the campaigns of Hillary Clinton and also the single largest known U.S. contributor to a charity linked to the LTTE.