David Cameron announces £6.6m was being set aside for Sri Lanka

Foreign aid to Sri Lanka was significantly increased after a businessman from the country oversaw donations of more than £1 million to the Conservative Party, the Daily Mail reveals today.

David Cameron announced last November that £6.6 million was being set aside for Sri Lanka over three years, including help for Tamils forced from their homes during the civil war.

In the year before the announcement, the Tory Party registered donations of more than £1million from Tamil businessman Subaskaran Allirajah and his controversial telecoms firm Lycamobile.

There are now questions about what has happened to the money, with UK aid money since going to the area in northern Sri Lanka where Mr Allirajah grew up.

Allirajah, 44, is the founder and chairman of Lycamobile, a firm that sells pre-paid phone cards. He grew up in Mullaitivu, a Tamil area in the north of Sri Lanka. He is now worth £160million and is reportedly the 640th wealthiest person in Britain.

The revelations come after Mr Allirajah faced scrutiny over claims of tax fraud and money laundering at his firm.

In 2009, the UK ceased aid to Sri Lanka for all but humanitarian emergencies after the end of the civil war in the country.

But after Lycamobile started donating to the Tory Party two years later, funds were allocated to the country from the conflict pool – a pot set aside for tackling instability overseas. 

In 2011, the Tories reported donations of £176,000 from Lycamobile. This rose to £250,000 in 2012. In that time, total UK aid to Sri Lanka jumped by more than two thirds to £5.5 million, with £1.3 million coming from the conflict pool. By 2013, total aid to Sri Lanka was £10.2 million, almost £3 million more than given to Iraq that year.

In November 2013, then-prime minister Mr Cameron became the first foreign leader to visit the north of Sri Lanka since it became independent in 1948. He called on the non-Tamil president to set up an independent inquiry into alleged war crimes against Tamil people. And he pledged £2.1 million over two years for a de-mining programme in three districts, including Mullaitivu.

In March 2014, Foreign Office minister Hugo Swire expressed concerns at the arrests of two human rights activists in Sri Lanka, who had been trying to secure the release of a Tamil mother and daughter.

Just 13 days later, the Tories registered donations of £105,000 from Lycamobile, followed by £15,000 three days after that.

In the year before Mr Cameron announced the £6.6 million to Sri Lanka, the Conservatives reported donations of £967,000 from Lycamobile and a personal donation of £100,000 from Mr Allirajah.

Less than two months before the 2015 general election, Mr Cameron met Sri Lankan president Maithripala Sirisena, who promised to identify land to return to the Tamils. Six days later, the Tories registered donations of £370,000 from Lycamobile.

-Agencies