Nov. 4 (Bloomberg) -- Raj Rajaratnam, the biggest investor in Sri Lanka’s stock market, has no immediate plans to sell holdings in the south Asian nation after insider-trading charges in the U.S., a person familiar with the matter said.

The Sri Lankan-born billionaire’s direct interests and stakes on the island held through his Galleon Group LLC won’t be affected by the liquidation of the hedge-fund firm following criminal and civil probes, according to the person, who asked not to be identified because the information is private.

The end of a 26-year civil war in May spurred a 97 percent rally in stocks, making the Colombo All-Share Index the best performer in Asia this year. Rajaratnam owns about 8 percent of John Keells Holdings Plc, Sri Lanka’s most valuable company, and a 20 percent stake he bought in June in brokerage firm Lanka Orix Securities Pvt, now known as Capital Trust Securities Pvt.

“He certainly was looking at further investments into Sri Lanka,” said Ajit Gunewardene, deputy chairman of John Keells, in an Oct. 27 interview in the capital Colombo. “He was very keen in giving back something to the country.”

The investments of Rajaratnam and Galleon funds in Sri Lankan shares were valued at about 13.3 billion rupees ($115 million) as of Oct. 19, according to estimates by CT Smith Stockbrokers Pvt in Colombo.

Renee Soto, a spokeswoman for Galleon in New York, declined to comment on Rajaratnam’s personal investments.

Rajaratnam was arrested Oct. 16 on charges he was at the center of a ring that earned $20 million in profit by trading on material nonpublic information about companies including Intel Corp. and Google Inc. He is free on $100 million bail and has said he is innocent.

John Keells

Rajaratnam, 52, invested in John Keells, whose businesses include transportation and property development, in his own name in 2002, according to the company. His stake in John Keells is valued at about $70 million, accounting for more than 60 percent of the billionaire’s and Galleon funds’ investments in 12 of Sri Lanka’s biggest listed companies, according to CT Smith.

The manager and his funds had held as much as 13 percent of John Keells, Gunewardene said.

“My understanding is that he would be holding on to the stake on a long-term basis,” he added.

John Keells has returned an average of 37 percent since the start of 2002.

Rajaratnam’s other shareholdings in listed companies are through funds of Galleon, company reports show. The person declined to say how much of the funds were Rajaratnam’s personal money.

Sri Lanka’s benchmark stock index lost almost 5 percent in the two days of trading after Rajaratnam’s arrest on Oct. 16.

Galleon has sold more than 90 percent of its investments worldwide, said a person familiar with the matter last month. Before Rajaratnam’s arrest, the firm had assets of $3.7 billion, including about $1 billion from Rajaratnam and employees, according to two people familiar with Galleon.

‘Supportive Shareholder’

Galleon has a stake of about 8 percent in DFCC Bank Ltd., said Nihal Fonseka, chief executive officer of the Colombo-based lender. The fund manager invested in DFCC Bank about three years ago when it bought a 10 percent stake in the open market, said Fonseka.

Galleon Diversified Fund Ltd. owned 9.09 percent of DFCC Bank as of June 30, according to the firm’s quarterly report.

The fund has been a “passive but supportive shareholder,” Fonseka said. “Even if they choose to divest the shareholding, I do not see this as a problem.”

DFCC has almost tripled this year.

Galleon’s investments in Sri Lanka also include 6.1 percent of National Development Bank Ltd. and 2.8 percent of Chemical Industries (Colombo) Plc as of June 30; 3.4 percent of Commercial Bank of Ceylon Plc as of Sept. 30; and 13.5 percent in Touchwood Investment Ltd. as of March 31, according to data from CT Smith.

Sri Lanka’s securities regulator said on Oct. 19 it will review transactions by Rajaratnam. Channa De Silva, director general of the Securities and Exchange Commission in Sri Lanka, declined to comment on the regulator’s review.

Rajaratnam’s net worth of $1.3 billion makes him the 559th richest person in the world, according to Forbes magazine.

To contact the reporter on this story: Netty Ismail in Singapore nismail3@bloomberg.net

Last Updated: November 3, 2009 20:53 EST