NEW YORK (Reuters) - Accused hedge fund billionaire Raja Rajaratnam and his family’s foundation were sued in a U.S. court on Thursday over allegations that they provided $5 million to Tamil Tigers militants in his native Sri Lanka’s civil war.
The lawsuit in U.S. District Court in New Jersey on behalf of 30 people who were victims or survivors of attacks by the Liberation Tigers of Tamil Eelam in the South Asian country’s civil war said the money assisted “crimes against humanity.”
Last Friday, Rajaratnam and five others were criminally charged by U.S. prosecutors and the FBI in New York in what they described as the biggest hedge fund insider trading case ever.
The Sri Lankan is known for his charitable donations and denies allegations that money found its way to the LTTE. Last month, the Sri Lankan government accepted his pledge of $1 million to rehabilitate former LTTE fighters after the end of the 25-year-long war in May.
“The accusation that Mr. Rajaratnam supported the LTTE is flatly untrue and libelous, and we are confident that the court will dismiss these baseless charges,” Rajaratnam’s lawyer Jim Walden said in a statement.
“Mr. Rajaratnam has the greatest sympathy for all victims of violence in Sri Lanka and has a long history of helping Sri Lankans of all ethnic groups through substantial charitable donations over many years.”
The lawsuit names Rajaratnam, his father J.M. Rajaratnam and the Tamil Rehabilitation Organization (TRO) foundation, which had a branch in New Jersey during the 2001 to 2007 period covered by the civil lawsuit. The foundation’s funds have been frozen in both Sri Lanka and the United States.
It accuses them of “aiding and abetting, intentionally facilitating and/or disregarding crimes against humanity in violation of international law.”
Rajaratnam gave at least $5 million to the foundation in 2005, to help rebuild after the tsunami hit Sri Lanka in late 2004.
Two years later, U.S. authorities proved that the TRO was funneling money to the Tigers, which were on a U.S. list of banned terrorist groups. Rajaratnam is Tamil, but his supporters point out that his personal foundation donated millions to help all ethnic communities hit by the tsunami.
The lawsuit was filed under the U.S. Alien Tort Claims Act, which allows nonresidents to sue in U.S. courts for alleged violations of “the law of nations.”
They “knowingly provided financial and material support to LTTE with the intent to advance the LTTE’s terror campaign,” the complaint said.
The case is Karunamunige Chamila Krishanthi et al v Rajakumara Rajaratnam et al, U.S. District Court in New Jersey (No. to be assigned)
Reporting by Grant McCool, additional reporting by C. Bryson Hull in Colombo; editing by Andre Grenon and Gerald E. McCormick