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The US government has stepped into a lawsuit sparked by Sri Lanka’s 2022 default, filed by Hamilton Reserve Bank (HRB) based in St Kitts & Nevis. This small bank, located in a nation with a population of only 50,000 and a GDP of under $1 billion, has somehow amassed a staggering $250 million face-value stake in a Sri Lankan bond.

Issued in 2012, this particular bond lacks certain clauses that typically make bonds easier to restructure. In essence, HRB’s significant stake theoretically grants it the power to veto any restructuring proposal put forth by Sri Lanka regarding this specific security.

While hedge funds specializing in identifying vulnerable sovereign bonds and accumulating blocking stakes are not uncommon, the size of HRB’s stake and its aggressive legal pursuit against Sri Lanka, initiated almost immediately after the default in April 2022, raised eyebrows.

The US government’s unexpected interest in the matter adds another layer of intrigue. While the US occasionally files “amicus briefs” to express its views on contentious legal cases, this level of involvement in such a routine matter is highly unusual.

Recent revelations from Sri Lanka’s law firm, Clifford Chance, have shed light on who may be driving HRB’s lawsuit – a Chinese-American financier named Benjamin Wey. Wey’s involvement raises questions about HRB’s ownership and potential legal and regulatory issues it may face.

Wey, described on his personal website as a “philanthropist and global financier,” has a history that includes promoting Chinese reverse mergers and legal controversies. Despite a checkered past, his influence in this case could have far-reaching implications for Sri Lanka’s financial future. The US government’s intervention suggests broader geopolitical interests at play in this seemingly straightforward legal battle.

Please note: This article is based on public information and does not imply any wrongdoing on the part of individuals or entities mentioned.