The 32-year-old Chow Wan arrested for attempted theft after he swallowed the fake diamond while showing interest in buying gems at the opening of FACET 2012 exhibition, Sri Lanka's international gem and jewellery show.
The 1.5 carat fake diamond was recovered after he was administered a dose of laxatives at the national hospital here on Saturday.
Nimal Bandara, the head of the Gems and Jewellery Bureau, said their tests have proved that the swallowed 'diamond' was a fake.
Now police claimed that another Chinese, who accompanied Chow, was the actual thief and they have launched a manhunt.
The police is on a lookout for the other suspect who they believe to have run away with the original diamond, Sri Lanka Mirror reported.