Sri Lanka’s creditors are unlikely to classify the recent USD 2.5 million Treasury fund diversion incident as a technical debt default, Deputy Minister of Finance Anil Jayantha Fernando told Parliament today, citing advice from the government’s financial and legal advisors involved in the debt restructuring process.

Responding to questions raised by Opposition Leader Sajith Premadasa, Fernando said the incident is likely to be treated as a cybercrime matter rather than a failure or refusal by the Sri Lankan government to repay its debt obligations.

“Although the funds remitted by Sri Lanka were not received by the Australian creditor, this does not indicate an inability or hesitation by the government to repay debt,” Jayantha said. “Given the close relations between Sri Lanka and Australia, and because this is a cybercrime incident, advisors have informed us that Australia and Paris Club members are unlikely to consider this a debt default,” he said.

Fernando said debt restructuring advisors had been consulted to determine whether the incident could be classified as a technical default, while investigations were continuing to establish the nature of the fraud.

According to the timeline presented in Parliament, Fernando said the Sri Lanka Computer Emergency Readiness Team (CERT) was informed of the matter on Jan. 9, 2026, while the Criminal Investigation Department (CID) was copied on the same day.

Australia Export Finance, the creditor involved, informed Sri Lankan authorities on March 23 that the funds had not been received, he said. The following day, the Director General of the External Resources Department lodged a written complaint with the CID, while the Financial Intelligence Unit (FIU) of the Central Bank was informed on April 1.

Fernando rejected allegations that the government had withheld information from Parliament regarding the incident.

“There was no attempt to avoid reporting facts to Parliament,” he said, adding that authorities decided to wait until more information became available through investigations, particularly regarding possible officials involved and internal control issues.

He said all findings would eventually be presented to Parliament.

Premadasa questioned why Parliament had not been informed earlier, given the timeline of events.

Fernando also addressed public speculation surrounding the death of the ministry official linked to the matter, urging both the opposition and the media to avoid spreading unverified claims.

This came in response to questions raised by Premadasa seeking clarification on claims that the deceased official was the first to identify and report the Treasury fund diversion to authorities.

“Not only does it mislead the public, but it also creates a bad situation,” Fernando said, declining to confirm or deny the claim.

The deputy minister said investigations by the CID, involving the Finance Ministry’s External Resources Department and the Public Debt Management Office were ongoing, adding that the continued service of the ministry secretary would not hinder impartial investigations.

“I am not prepared to present baseless information until investigations are complete,” he added. (Newswire)

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