An article published on Mail Online said David Cameron had 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 £1 million from businessman Subaskaran Allirajah and his controversial telecom 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 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
£160 million and is reportedly the 640th wealthiest person in Britain. The revelations come after 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.
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 Cameron became the first foreign leader to visit the north of Sri Lanka since it became independent in 1948.
In the year before 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 Allirajah.
A spokesman for the Tory Party said: 'All donations to the Conservative Party are properly and transparently declared.' Daily Mail.