One of the Conservative party’s biggest corporate donors, Lycamobile, is facing serious questions over its finances after three bagmen were secretly filmed dropping off rucksacks stuffed with hundreds of thousands of pounds twice a day at Post Offices across London.



A five-month investigation by BuzzFeed News has revealed that the Lyca telecoms group deploys three men to drive around in an unmarked people carrier depositing bags of money, which have totalled up to £1 million each week. Legal and financial experts said the “deeply suspicious” cash deposits should be urgently investigated.

Lycamobile has donated more than £1.3 million to the Conservative party since David Cameron came to power, including over £500,000 in this year alone, despite avoiding paying any corporation tax for years by moving revenue out of the UK through a complex offshore corporate network.

The evidence of Lyca’s unorthodox Post Office deposits comes in the wake of criticism from its new auditor, KPMG, which unearthed almost £46 million of previously undeclared revenue earlier this year and said the company had failed to properly explain the gap in its finances so it had been impossible to tell whether “adequate accounting records” had been kept.

Internal Tory emails show that the party accepted a large donation from the telecoms giant just days after the party’s compliance department raised concerns about its chaotic accounting in 2012. The gift bought the company’s Sri Lankan-born owner, Subaskaran Allirajah, a place in David Cameron’s private dining club for top donors, and the emails show he promised to advise the party on business and help deliver British Asian votes.

BuzzFeed News can also reveal that authorities in Sri Lanka are launching an investigation into a key offshore company in the Lyca empire as part of an international probe into allegations of corruption by the country’s despotic former president Mahinda Rajapaksa.

There is no evidence of any connection between the corruption allegations in Sri Lanka and the mysterious cash deposits in London. However, the Tories are now facing renewed pressure to sever their ties with the company, having previously brushed off warnings about its links to Rajapaksa, who is accused of presiding over a kleptocracy and multiple crimes against humanity during his decade in power.

Lyca declined to answer detailed questions from BuzzFeed News but said the police were aware of security processes in place at the east London depot where it stores its cash. It said the deposits were "day to day banking," sanctioned by the Post Office. It has previously said that it is a cash-rich business because it collects money from shop owners selling its prepaid international calling cards and SIMs all over London.

However, experts said the company’s unorthodox method of depositing cash at scattered locations should raise a red flag with the anti-money-laundering and tax authorities. Lord MacDonald QC, the former director for public prosecutions, called for an urgent investigation into Lyca’s financial activities after seeing the evidence gathered by BuzzFeed News. “The use of unmarked vehicles, the lack of any security arrangements, the repeated deposits of huge sums of cash to multiple branches of the Post Office, is all conduct that cries out for explanation,” he said. “Frankly, this is not the way a normal ... business deposits its cash. It is deeply suspicious and it demands serious investigation.”

Senior Labour MPs joined calls for an urgent investigation and demanded that the Tories freeze all further donations from Lyca and consider handing back the money they have already accepted. Meg Hillier, the chair of the powerful Commons public accounts committee, said HMRC should launch an inquiry into the company's financial behaviour, and her predecessor, Margaret Hodge, said the revelations were "absolutely shocking".