The CID arrested the managing director of a garment factory in connection with the handing over of 400 counterfeit 5000-rupee notes to another party -- after the Cinnamon Gardens branch of the HSBC had identified them as counterfeits as they were about to be deposited.

Dulanjalie Jayakody,-daughter of former president Ranasinghe Premadasa, had gone to the bank at about 2.00 pm today to deposit Rs.2 million (comprising 400 counterfeit 5000 rupee notes) which had allegedly been given to her by the suspect businessman, who had earlier borrowed such a sum from her, police said.

The bank had found that they were counterfeit notes and immediately called in the Criminal Investigation Department (CID). The Currency Notes Investigations Unit of the CID had questioned Mrs. Jayakody regarding the source of the counterfeit notes and recorded her statement.

She had named the managing director as the source of the notes.

The suspect was a resident of Etulkotte. He is currently in CID custody and undergoing further interrogation. (Supun Dias)