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Sri Lanka sued by Bondholder in US court

edited June 2022 in Corruption & thievery

Before diving into the news here are some points for your critical analysis to increase your political literacy.  Political literacy is very important if you want Sri Lanka to become a developed nation with a good living standard.

1 Billion sovereign bonds Maturing on 25th July 2022 This was agreed to in 2012 by former Central bank Gov Ajitrh Nivad Cabraal and HSBC USA.
What happened to this money?
This is why we need a forensic audit!
Why take a sovereign bond instead bilateral loan? (Look at the inters rate)
The court document has the source and citation about its details about the multibillion Doller theft.
Mr 10% (aka Kaputa)

The case is Hamilton Reserve v. Sri Lanka, 22-cv-5199, US District Court, Southern District of New York (Manhattan).

A privately held bondholder sued Sri Lanka in the united states district court in manhattan over the country's alleged default on a 1 billion u.s
dollar sovereign bond maturing next month hamilton reserve bank limited which holds more than 250 million us dollars of Sri Lanka's 5.875 percent international suffering bonds due on the 25th of July filed the
a suit seeking full payment of principal and interest Sri Lanka has defaulted on its debt for the first time in its history as the country struggles with its worst the financial crisis in more than 70 years against this backdrop

A 1 billion us dollar international sovereign bond will
mature on the 25th of July 2022 which was agreed to in 2012 by the central bank governor Ajit Nevad Cabraal and HSBC America hamilton reserve bank limited which holds more than 250 million us dollars of Sri Lanka's 5.875 percent international sovereign bonds due July 25th filed the suit seeking full payment of principal and interest according to the suit filed in court Sri Lanka owes the plaintiff a total of 257 million u.s dollars comprised of 250 million us dollars in principle and 7.3 million us dollars in interest hamilton reserve bank limited demanded immediate payment of 257.5 million us dollars of principal plus interest saying Sri Lanka had stopped servicing its sovereign debt and missed payments on two other bonds causing a cross default it said that Sri Lanka had openly stated its inability to settle the debt in February 2022.

The complaint notes that Sri Lanka's default is being orchestrated by officials at the highest level of its government and this includes the ruling Rajapaksa clan whose members currently serve as president of Sri Lanka and in numerous other senior government positions the court document also notes that the Rajapaksa family members have repeatedly been accused of lighting their own pockets through years of corruption also noting that former u.s government officials and investigative journalists have exposed that the Rajapaksa family has amassed a multi-billion dollar fortune and hidden part of it in bank accounts in offshore jurisdictions such as Dubai Seychelles and saint martin the complaint also goes on to note that u.s
government documents report that in prior government appointments u.s Sri Lanka dual citizen Basil Rajapaksa earned the nickname Mr 10% for demanding a 10 commission on every project and makes a habit of trying to buy people the complaint notes that Sri Lanka is not entitled to any immunity from jurisdiction Sri Lanka is once again making the rounds on international media platforms this article published by Reuters say that more than 30 entities that hold bonds issued by Sri Lanka have now formed a group the purpose of forming this group is to hold debt restructuring talks with Sri Lanka interestingly they have hired Rothschild and co as their financial advisor the second case relating to Sri Lanka involves a bank called hamilton reserve bank limited now this bank as you can see on its website has its headquarters in saint kitts and nevis which is one of the world's largest tax havens this bank has filed a the case at the u.s district court in manhattan they are requesting the u.s court to issue an order directing the sri lankan government to repay its international sovereign bonds worth about 250 million us dollars along with the interest payments of these bonds had been issued by the central bank in 2012

when ajut nivad khabral was serving as the central bank governor in court documents this bank has raised concerns and suspicion on whether sri lanka will be able to settle this international sovereign bond in july because they point out that sri lanka had announced that it would default on its debt repayment on its foreign debt repayment even after settling uh the 500 million us dollar international sovereign bond in january, this year now in court filings the hamilton reserve bank limited has raised multiple accusations they have leveled multiple accusations against those in power here in sri lanka in these four documents they have said that sri lanka's default the default is being orchestrated by several senior officials in the sri lankan government have also accused the raj pakistan family of hiding their wealth in countries like dubai seychelles and saint martin which are often known as offshore jurisdictions or tax havens if we can simplify it now interestingly in these course documents  this particular bank hamilton reserve bank limited has also referred to uh Basil Rajapaksha (aka Kaputa) sri lanka's former finance minister as mr 10 percent they cite several documents issued by the u.s as a reason for this they say that basil rajpaksa had earned that name uh mr 10 as a result of demanding a 10 percent commissions in all projects involving sri lanka there are several sri lankan officials who are in linked to the term bonza here in sri lanka this man on to my left is arjuna mahindran is the former governor of
the central bank of Sri Lanka he is, in fact, a suspect in the central bank treasury bond scam that took place under the previous government, and this man on to my right is Ajit Nivad Kabraal the former governor of the central bank he has held the position of central bank governor on multiple times and it was during his tenure as the governor of the central bank in 2012 that Sri Lanka had issued international sovereign bonds to hamilton reserve bank limited this is Ranil Vikrama Singh the current prime minister of Sri Lanka he together with the former central bank governor one of the former central bank governor Arjuna Mahindran caused billions of rupees in losses to the employee's providence fund when the central bank treasury bond scam was committed under the previous government

and this man on screen is basil Rajapaksa (aka Kaputa) Sri Lanka is a former finance minister who has been referred to in court documents as Mr 10 percent for demanding commissions from all projects carried out by Sri Lanka involving the Sri Lankan government now hamilton reserve bank limited in its court filings have accused the Rajapaksa clan of hiding wealth in several offshore jurisdictions as a responsible and a democratic state we never know whether the u.s will be able to seize the assets of
several officials involved in corruption in order to repay the international sovereign bonds held by this particular hamilton reserve bank limited we also do not know what sort of disrepute this whole saga will bring to Sri Lanka and if the u.s district court in manhattan issues an order instructing the Sri Lankan government to repay the international sovereign bond we do not know how far Sri Lanka will be able to do that at a time when the country is facing a shortage of dollars only time will tell
more than 30 asset managers holding Sri Lanka's international bonds announced the formal launch of a creditor group to start debt restructuring talks with the island nation according to a statement from legal advisor white and case LLC a Mundi asset management BlackRock HBK capital management morgan Stanley investment management and t raw price associates incorporated are among members of the group steering committee which has Rothschild and co as a financial advisor the statement said that the group is broadly representative of Sri Lanka's bondholder base both by type of institution and by geography and holds bonds across each outstanding series however it did not specify the
percentage of bonds it holds on the outstanding 12.6 billion u.s dollars
overseas sovereign debt Sri Lanka has hired heavyweight financial and legal advisers lazed and Clifford chance as it prepares for the difficult task of renegotiating its complex web of creditors including bilateral lending from japan India and china the creditor group said it was ready to engage in talks with both Sri Lanka's authorities and other creditors adding that the country should quote implement a package of meaningful reforms and fiscal adjustments unquote

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