AKD Reward to Hulangamuwa after the NDB 13 B Fallout and USD 2.5M Cyber Heist from FM
By: Adolf
July 05, LNW (Colombo):
New Board minus the previous lot
Sitting in Europe reading all the social media post surrounding the ex EY managing partner Duminda Hulungamuwa I was surprised when President Anura Kumara Dissanayake officially appointed Duminda Hulangamuwa as Chairman of the Board of Investment (BOI) on June 30, 2026, along with four other board members. The appointment placed one of the most controversial Tax and business advisers at the helm of Sri Lanka’s primary investment promotion agency. However, the decision has ignited intense controversy, with critics questioning the suitability of a figure so closely associated with major financial scandals and policy failures. For a government that rose to power on a wave of anti-corruption sentiment, the move appears contradictory at best and dangerously compromising at worst.
The NDB Fraud and Audit Failures
The most serious concerns center on Hulangamuwa’s tenure as Country Managing Partner of Ernst & Young (EY), the external auditor for National Development Bank (NDB) during a massive internal fraud. The fraud, first disclosed in April 2026, was initially estimated at Rs. 380 million but was shockingly revised to Rs. 13.2 billion just days later. It was reportedly executed through electronic transfers over an extended period, causing “massive anomalous balance sheet inflation” that went completely undetected by internal controls.
A derivative action has been filed against NDB’s board, directors, and external auditors, including EY and its partners. The petition argues that the abnormal spike in financial asset balances “should have been a glaring red flag for both the directors and auditors,” representing a “colossal failure of basic risk and compliance audits.”Critics argue EY’s failure to identify these red flags enabled NDB to raise approximately Rs. 16 billion through sustainable bonds from investors who were unaware of the fraud. As one commentary noted, “professional negligence is as damaging as subversion or mischief.” Several individuals have been arrested, Interpol is assisting the investigation, and Deloitte India has been appointed for an independent forensic review.
The question that haunts this appointment is simple yet damning: if Hulangamuwa’s firm could not detect a fraud of this magnitude under its own watch, what confidence can investors place in his oversight of billions in foreign direct investment?
The Treasury $2.5 Million Cyber Heist
Additionally, Hulangamuwa served as an advisor in the Ministry of Finance when US$2.5 million in Treasury funds was diverted to a rogue account through a cyber-enabled financial fraud. The fraud involved compromised communication channels, with officials failing to verify account details before transferring the funds. Four senior Finance Ministry officials were interdicted, and one official was found dead in an apparent suicide. While a Cabinet spokesman stated the Ministry would issue a clarification, the incident further raises questions about oversight during Hulangamuwa’s advisory tenure.For a position that demands credibility, these two episodes—totaling nearly Rs. 13.2 billion in undetected fraud and US$2.5 million in stolen public funds—represent a track record that would disqualify most professionals from any public office, let alone the chairmanship of the nation’s premier investment agency. But the Sri Lankan Investment Agency has seen so many pathetic political appointees like Hemasiri Fernando , Thilan Wijesighe who was prosecuted and later exonerated Saliya Wickramasuriyawho was remanded and released
Policy Failures and Governance Concerns
Hulangamuwa’s track record as a policy advisor has also drawn scrutiny. During the previous administration, he championed a self-assessment tax system for Gotabaya intended to streamline revenue collection. The policy reportedly “proved disastrous,” with the government losing billions in potential revenue and being forced into a “humiliating policy reversal.”Furthermore, conflict of interest concerns have been raised, while heading EY, he served in the Ministry of Finance advising on Tax Matters, questions emerged about tenders being awarded under “dubious circumstances.” The overlapping roles blurred ethical lines and raised legitimate concerns about whether private-sector influence was being leveraged for undue advantage.
Political Motives and Internal Tensions
Analysts suggest the BOI appointment may be an attempt to distance Hulangamuwa from the Treasury amidst growing criticism. By relocating him to a high-profile but operationally distinct agency, the administration could be seeking to insulate him from further scrutiny while retaining his counsel. However, political sources indicate the hardcore JVP faction within the government views him as a “liability for the next election” and resists attempts to shield him from accountability. For a coalition that prides itself on transparency and grassroots integrity, keeping a figure with such baggage in a position of influence risks alienating the very base that propelled AKD to power. The internal friction suggests the appointment is far from unanimously supported, and the fallout could reverberate through future electoral contests.
A High-Stakes Gamble
The administration, acknowledging its limited experience in economic management, appears to view Hulangamuwa as a strategic injection of private-sector expertise. Yet as one commentary observed, this creates a paradox: “if the economic strategy is being shaped by the same individuals who advocated for failed policies in the past, is the nation merely setting itself up for a repeat of previous mistakes?”
With Sri Lanka navigating stringent IMF targets and the urgent need for foreign direct investment, the appointment demands rigorous oversight to ensure the BOI’s leadership is defined not by past controversies but by genuine national revival. The President has staked considerable political capital on this decision. Whether it proves to be a masterstroke or a miscalculation will depend not on the appointment itself, but on the accountability and performance that follow.
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