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Rajaratnam begins offloading holdings in Sri Lanka

[Hindu, Thursday, 19 November 2009 10:48 No Comment]

Sri Lanka-born U.S. business tycoon, Raj Rajaratnam, arrested by the FBI on October 16 on charges of vast insider trading, has began selling part of his firm’s holdings in Sri Lanka to cover some of the money required to finance his $100 million bail.

Mr. Rajaratnam, the billionaire chief of the Galleon Fund, lost in the first week of November his bid to reduce the value of his bail condition. U.S. Judge Theodore Katz said in the Manhattan courthouse that there was no need to “revisit” the value of the bail amount, but agreed to permit him to travel across the mainland U.S.

Sri Lanka media reports said that Mr. Rajaratnam’s Galleon has begun exiting from Hatton National Bank after it shed holding in Commercial Bank. The only consolation for the Sri Lanka Government is that partial pulling of assets of his company has not had the expected adverse impact on the stock market and economy.

Mr. Rajaratnam and Galleon Fund have investments in the region of $105 million — nearly one per cent of the value of the Colombo Stock Exchange.

Since his arrest, Mr. Rajaratnam has faced several problems. Days after the FBI dragged him to court, victims of LTTE violence filed a law suit against him on charges that he and his father knowingly helped the terrorist group.

According to the Sri Lankan Defence Ministry, the LTTE’s arms procurer and Prabhakaran’s successor Kumaran Pathmanathan a.k.a. KP revealed during interrogation that Mr. Rajaratnam had been a leading contributor of money to the LTTE.

Reports from the U.S. said Mr. Rajaratnam was being sued for unspecified amounts in damages for the LTTE’s acts of violence. Jim Walden, his lawyer, was quoted as saying that the charges brought by the Sri Lankan victims were baseless.

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