Sri Lanka confident there is no technical default over cyber heist of debt repayment

Sri Lanka is confident that there is no technical default after hackers diverted funds destined to Australia’s export credit agency, Treasury Secretary Harshana Suriyapperuma said.

Cyber criminals breached emails of the External Resource Department and the creditor and diverted repayments of around 2.5 million dollars to themselves.

“At a diplomatic level we have informed the Australian embassy, the creditor concerned,” Suriyapperuma said.

“We have exchanged information and quickly made them aware.”

The repayments to Australia were part of a broader restructuring of Sri Lanka’s debt after a default in 2022.

Chairman of Sri Lanka Parliament’s Committee on Public Finance Harsha de Silva had questioned whether non-payment of instalments due to the hack could amount to a technical default.

“We discussed whether this could be interpreted as a technical default,” Suriyapperuma said. “We have been advised that Sri Lanka had demonstrated the ability to repay debt, and we have also displayed our intention and willingness to repay by making the payment.

“By intervening in the middle, cyber criminals have diverted the funds to a different path.

“We are also discussing with the other party, demonstrating good faith. We are confident that this event cyber criminals diverting funds, there is no technical default. That is what our advisors have also informed us.”

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Sri Lanka is strengthening security at the Treasury and was also working with local and international law enforcement authorities to nab to criminals.

Several Sri Lankan officials have also been suspended.

The Treasury had not immediately disclosed the hack after it was discovered, to help law enforcement authorities investigate the matter without alerting the criminals, he said.