Writing for the Financial Times’ “beyondbrics” section, Hugo Cox describes why foreigners may have to be wary of doing business in Sri Lanka, using the story of Geoffrey Dobbs, who owns four hotels in Galle and is the founder of the Galle Literary festival.

Dobbs is facing deportation for hanging the Sri Lankan flag upside down ahead of the Commonwealth Heads of Government Meeting last November.

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A leading British hotelier in Sri Lanka faces deportation after hanging the Sri Lankan flag upside down. Should foreign businessmen on the island beware?

Geoffrey Dobbs, a British and Australian citizen who owns four boutique hotels in and around Galle, Sri Lanka’s second city, noticed that at least four commonwealth flags – including Australia’s – had been hung upside down or manufactured back to front.

Dobbs informed state governor Kumari Balasuriya, first in person (they are neighbours) then, when no action was taken, by email, noting that there would be “all hell to pay” were the Sri Lankan flag to be given similar treatment. When still nothing changed, Dobbs “staged a protest” by hanging the Sri Lankan flag upside down from his staff quarters located right outside the governor’s residence.

Dobbs was immediately reprimanded by police and apologised to Balasuriya. But in December, coming back from a trip to Bangkok, he was denied entry at Colombo airport and forced to return on the next flight.

Although it admits that workers hung the flags the wrong way by mistake, comment from the Sri Lankan government has been bellicose and contradictory. Initially, in an interview with Sri Lanka’s Sunday Times, Balasuriya claimed that Dobbs had left the country to avoid arrest. Then, before Christmas, she told AFP: “He is a very undesirable person and we have decided to blacklist him and prevent him from entering the country.”

But in response to an enquiry from beyondbrics, she said: “I do not know whether he is blacklisted or not. It is up to the department of immigration and emigration to decide.”

Dobbs believes the government’s pugnacious response is symptomatic of a more belligerent – and protectionist – nationalism that has characterised President Rajapaksa’s second term, following a landslide victory in 2010.

He says that if he is barred from Sri Lanka, he will relocate to the UK, Nepal or Croatia, where he also has business interests and land. He would retain ownership of his hotels in Sri Lanka but likely wind up his charitable trust, which has raised $5m for projects on the island including disaster relief following the Tsunami and an exchange program for teachers and schoolchildren. Deportation would also spell the end of Dobb’s Galle Literary Festival that since 2007 has attracted authors including Tom Stoppard and Richard Dawkins, which would relocate elsewhere.

“[Dobbs] should be grateful that this country afforded him the opportunity [of developing his businesses] for the past 15 years,” Balasuriya told Sri Lanka’s Sunday Times in December. If Dobbs is barred from returning, foreign nationals with business interests in Sri Lanka may feel that the welcome extended by President Rajapaksa’s government comes with more conditions than they had appreciated.