26 September, 2020

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Rs. 207 Million At Sri Lanka Insurance Has Been Swindled

By Colombo Telegraph

A large sum of money amounting to 207 million rupees at Sri Lanka Insurance has been swindled as a result of the selection of an insurance broker whose license had been cancelled, Transparency International reports. This has occurred in connection with the reinsuring the properties of the Ceylon Petroleum Corporation. This allegation is being made by the the Coalition against Corruption.

The Coalition states that as a result, the assets of the Corporation have no insurance protection. An investigation on the matter has already been conducted by COPE – the Parliamentary Committee on Public Enterprises.

The Coalition alleges that the reinsurance broker concerned is an Indian named Suresh Balakrishnan who had been involved in a similar fraud while serving at M.F. Insurance and Reinsurance and the Indian authorities had cancelled his license. At an investigation by the Auditor General’s Department it has been revealed that he had not paid the premium Rs 92 million that had to be paid for 2009/2010 to the reinsurance companies in respect of the assets of the Petroleum Corporation. The broker had done the reinsurance under Transasia Management Advisor FZC from United Arab Emirates.

Subsequently, the Rs. 116 million (Rs. 116,850,000/-) reinsurance premium for the Petroleum Corporation for the year 2010/2011 has been paid to Suresh Balakrishnan on 02.07.2010 by the officials of Sri Lanka Insurance on a request made by Balakrishnan the previous day. Thus the total amount of reinsurance is Rs. 208 M.

It is the general practice worldwide to insure highly valuable property among several reinsurance companies in order to ensure that any liability is distributed among them. For this purpose the service of reputed brokers are made use of.

The total value of the assets of the Petroleum Corporation which presently have no insurance cover is estimated to be Rs.75.39 billion (75,97,909,813/-). These include the Sapugaskanda Oil Refinery, oil stocks stored at the refinery, the Sapugaskanda boiler, Orugodawatta terminal, oil stocks at the terminal, property at the Katunayake International Airport and oil stocks there, and the oil stocks at Muthurajawela.

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Latest comments

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    Surely there must be a powerful politician behind this fraud. It is a pity that the President did not call the Auditor General for a discussion about the matters relating to audit officers of the department before the expose of the fraud!

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      Insurance is a SCAM today! So, who cares if debt ridden CPC has no insurance?!
      The whole notion of insurance as it operates today is to begin with a scam and part of the neo-liberal TRICKLE UP global financial system that is all about making the rich richer, the poor poorer, and increasing INEQUALITY to the point of destabilizing societies and causing violent conflicts that are chanelled into attacks on ethnic and religious minorities..

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    As far as all insurance coverage of state enterprises property is concerned the Govt must define a list of acceptable brokers and insurance companies to carry out this work, who in turn give the Govt. guarantees and bonds that are enforceable in the event there is fraud, by lack of coverage.

    It is a simple rule to implement and it is imperative that state assets are protected. Do understand however that NONE of the state vehicles have insurance cover, and at least I would consider it mandatory that all carry a minimum insurance cover as it is a HR violation of those who are at the receiving end of claim against a state vehicle/driver, and currently have NO recourse.

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    From the looks of what’s going on very soon they will finger the EPF,
    ETF openly – in addition to the adventure where they used the unemployed Kariyawasam. Someone very much in the higher tiers of the business community tells me they fear very soon both People’s Bank and the BoC will be on the road to eventual collapse with VVIPs insisting on bottomless loans to failing State utilities in which they have personal interest of a venal nature. Heads of both giant State Banks are established regime sycophants.

    The Sinhala Nation have to hold themselves responsible for voting established suspicious characters into governance roles – over and over again and ad infinitum. There is little doubt the Sinhala people will be forced to hit the streets soon stung by hunger and poverty. By that time it will be too late. The horse has already bolted and will gather up what is within their reach before they hightail it to the West. The international community will have to save the Tamil Nation and restore them to their rights of the post-colonial period when they ruled themselves.

    Senguttuvan

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    In my fifteen years experience as an employee of the Insurance Corporation since its inception I have seen the institution being a open playing field mainly for political appointees, whichever the party was in power, to swindle its resources as much as possible. In the early 1970s one appointee appointed as a Director arrived in a corroded Morris Minor and just a few months later, after a controversial fire claim settlement in which he was said to be involved, he was able to buy a Toyota Crown which was a very expensive one at that time. In a similar situation in the 1980s a brief-less lawyer who too was appointed to a top post was able to buy a Million Rupees worth property in Colombo 7, that too after a share purchase deal in which he was said to be involved. There were many such cases where political appointed Directors and Govt. favoured employees made money through corrupt methods. Finally the Corporation was run-down as an un-manageable institution and was sold to a private business magnate all assets under-valued and sold for a song. Thanks to the legal action taken by Mr. Vasudeva Nanayakkara the sale was subsequently ruled irregular by the Courts and returned back to Govt. management. Again the process of swindling has begun and history is repeating.

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    Sirs

    The article states that the premium misappropriated was for the year 2009-2010. There was probably no re-insurance protection then. How relevant is it to covers for the year 2012-2013 which would obviously require a separate payment of annual premium, is it not ?

    Sunil Vora

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