The Sri Lankan Central Bank said the probe against Raj Rajaratnam, who was arrested in New York on Friday on charges of insider trading, was continuing.

“The Central Bank states that investigations are continuing in relation to the funding allegedly provided by Mr Raj Rajaratnam to the Tamil Rehabilitation Organisation (an LTTE front),” it said in a statement.

Rajaratnam is the founder of US hedge fund firm Galleon Group.

The central bank further said any reports that suggest such investigations are concluded or that Rajaratnam has been cleared of possible involvement are incorrect and misleading.

Meanwhile, the Securities and Exchange Commission of Sri Lanka has begun taking a close look at the recent transactions of Sri Lankan billionaire Rajaratnam in the country’s bourse as the Colombo All Share Price Index lost over two per cent in opening trade today.

Two Indian Americans Anil Kumar, Rajiv Goel (both 51) and Rajaratnam (52) are among six people arrested in connection with a USD 20 million hedge fund insider trading scam, the largest ever such case in the US.

Rajaratnam is a major investor in the Lankan stock market and has large stakes in blue-chip companies.

Tamil-origin Rajaratnam has pledged USD one million in Sri Lankan government’s efforts to rehabilitate ex-LTTE cadres.

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