Sri Lanka-born United States business tycoon Raja Rajaratnam, arrested by the FBI on October 16 on charges of vast insider trading, is reportedly planning to sell some of his firm’s holdings in Sri Lanka to partly finance his $100 million bail condition.
Mr. Rajaratnam, the billionaire chief of the Galleon Fund, lost his bid on Friday 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.
The English weekly The Sunday Leader in a report said: “During the hearing, Mr. Rajaratnam said that he was in need of at least $2.5 million, which he said was used as part of his bail monetary amount. He needed this, his attorney John Dowd said, to pay some liabilities of the Galleon Fund. Mr. Dowd also added that his client was bringing back some assets of his from Sri Lanka, the land of his birth.”
Impact on stock exchange
The weekly said Mr. Rajaratnam’s latest move will likely send shock waves throughout the Colombo Stock Exchange, where he and Galleon Fund have investments in the region of $105 Million — nearly one per cent of the value of the Colombo Stock Exchange.
“The return of an amount as large as $100 million from Sri Lanka would have an impact on the already fragile state of the exchange rate in Colombo. Some analysts say that notwithstanding what was said in court, any decision to sell would be taken with prudence by Mr. Rajaratnam’s fund managers in Colombo,” the report said.
Prosecutors told Judge Katz that they had a strong case against Mr. Rajaratnam (52) based on recorded conversations he made and on the testimony of several witnesses, including former Intel Corporation executive Roomy Khan. Assistant U.S. Attorney Josh Klein also offered new details about the government’s investigation.
Federal prosecutors in New York on Friday announced charges against another 14 people, bringing to 20 the number of people charged in the largest-ever alleged hedge-fund insider trading case.
LTTE funding charges
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 Kumar Pathmanadan 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.
The Sri Lankan Defence Ministry also quoted KP as telling his interrogators that Mr. Rajaratnam’s contributions to LTTE were “intricately connected with the opposition politicians outside the LTTE but implementing a parallel political agenda with the terrorist group.”
