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Hospital projects in Lanka: Corruption probe in the Netherlands over fund transfer to Lankan businessman
View(s):By Namini Wijedasa
Dutch authorities are investigating deposits made by a Netherlands-based healthcare firm involved in two Sri Lankan hospital projects into the offshore account of a British Virgin Islands-registered company whose beneficial owner is a prominent Sri Lankan businessman.
The Dutch Fiscal Intelligence and Investigation Service (FIOD) carried out searches “in an investigation into corruption,” a press release from the office said, adding that searches and/or witness interviews were also concurrently done in three other countries last year.
The inquiry targets two companies that are not named in the press release. However, the Dutch financial daily, Het Financieele Dagblad (FD), confirmed that they are Enraf-Nonius and AKM-International Project Development. The newspaper shared public documents regarding the probe with the Sunday Times.
The Sri Lankan projects are hospital constructions in Hambantota and Nuwara Eliya, for which an agreement was signed between EN-Projects and the Ministry of Health in Colombo in June 2011. EN-Projects is a subsidiary of Enraf-Nonius of the Netherlands.
The Sunday Times has previously reported how—while probing possible fraud in the lease of land in Fort to Krrish Transworks Colombo (Pvt) Ltd—Sri Lanka’s Financial Crimes Investigation Division (FCID) uncovered hefty deposits into the Singapore bank account of a British Virgin Island company named Sabre Vision Holdings Ltd (SVHL). According to documents, its beneficial owner and account holder was self-professed stock market guru Wannakawattawaduge Don Nimal Hemasiri Perera.
Records revealed several payments were made into SVHL’s accounts from August 21 to October 31, 2012. One deposit was from the Germany-based Deutsche Bank Privat–Und Geschaeftskunden Ag account of the German company, Juga Bau GmbH. Another was from the Australia and New Zealand Banking Group Limited (ANZ) bank account in Australia of Aspen Medical Pty Limited, the Australian company.
A third was from the Rabo Bank Nederland account in the Netherlands owned by Enraf-Nonius (EN-Projects). Remitted within 42 days, the payments totalled 4,330,785.02 euros and USD 536,909.80 and were purportedly for “consultation”. (The FCID traced that Juga Bau GmbH had also received the money into its own account from EN-Projects).
Sri Lankan authorities reached out to the Dutch and Singaporean governments as far back as November 2019 under the Mutual Assistance in Criminal Matters Act, requesting information about transmission from and to the SVHL bank account.
Now, FIOD, under the supervision of the Dutch Public Prosecution Service, says two companies are suspected of “official corruption and forgery” while “four people are suspected of having actually directed the prohibited conduct of the companies”.
AKM-International Project Development is not mentioned in the FCID investigation. However, FD reported this week that IPD, a development branch of the architectural firm AKM from Barendrecht, supervised and monitored the technical design and construction finances (among other things) and signed contracts with Enraf-Nonius for this purpose.
“The IPD directors acknowledge in a written response that from 2012 to early 2015 they transferred payments to a company that, as they learned ‘only recently’, may have been abused by Nimal Perera,” FD writes. “IPD states that payments were checked and approved in advance by Enraf-Nonius, and the procedure was discussed with Rabobank and the tax authorities.”
IPD has also emphasised that it has no knowledge of “unlawful acts” and that it still has confidence in Enraf-Nonius’s former management (the company was sold to new owners in 2021), FD reports.
In its press release, FIOD says that during searches in three homes and two business premises in The Hague, Barendrecht and Rotterdam, digital and physical evidence was seized.
“It is suspected that bribes were paid for years via the suspected companies in order to obtain contracts for the construction of multiple buildings with a public function abroad,” FIOD says. “The payments were made to foreign bank accounts of companies of an intermediary. The bribes were probably intended for a high-ranking foreign official. In order to conceal the payments, the suspects drew up false documents such as agreements and invoices.”
FIOD does not name the high-ranking foreign official. “The foreign projects were financed by a Dutch bank and insured by the Dutch government,” it continues. “The criminal investigation was initiated, among other things, after a report of an unusual transaction to the Financial Intelligence Unit (FIU) and information from the International Anti-Corruption Coordination Centre (IACCC).”
At the same time as the searches in the Netherlands, searches and/or witness interviews were conducted in three other countries, it said.
Meanwhile, FD’s investigative journalists report that the Dutch prosecutor suspects that the two companies paid bribes in the construction of the hospitals in Sri Lanka.
“In order to obtain the projects with a value of at least €100 million, millions in bribes were allegedly paid, according to the judiciary, probably to a high-ranking civil servant,” they say. “The bribe payments were allegedly concealed with forged contracts and invoices.”
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