Colombo Telegraph

Should Unsavoury Things Continue Unabated?

By Rusiripala Tennakoon –

Rusiripala Tennakoon

This story is about another alarming transaction that remains under cover.

While the sum involved is very high, as a questionable deal, the involvements extend beyond the realm of the misuse of public funds towards the unethical conduct of a leading local private sector commercial bank operating in Sri Lanka apparently acting in collusion.

The relevant facts as reported by a person who has made a written complaint to the IGP asking him to investigate into the matter are as follows:

The Company by the name Magampura Port Management has been incorporated in July, 2013 with the Sri Lanka Port Authority as the sole shareholder. Address of the registered office is given as 19 Chaitya Road Colombo 1. The first directors of the company as per the records with the Registrar of Companies have been, Shirani Wanniarchchi of 380/70 Saram Road, Colombo 7 and Dalath Upali Wickramasinghe De Zoysa of No. 99 Ellie Road, Colombo 15.

This company has obtained the rights under a license granted for that purpose to engage in oil bunkering business. During the early days the right to import oil was restricted to the CPC and LIOC.

MPMC has been granted credit facilities to conduct this business by this Bank associated with the deal.

Accordingly during the period between September and December 2014, the bank has provided facilities totaling up to US$ 24 Million for oil imports and bunkering business to MPMC.

The Sri Lanka Ports Authority has offered a corporate guarantee to secure this facility on a subsequent date after it was granted. MPMC has engaged in this business with the help of a private company which has acquired a small percentage of the shares of MPMC and this private company has nominated an employee of their company to be appointed as an Adviser/Consultant of MPMC to facilitate their role in the oil import and bunkering business.

During the transaction MPMC has paid between US$220 to 225 per metric ton when the prevailing oil prices averaged US$ 200 per metric ton. Approximately about 86,000 metric tons of oil (3 different categories) have been purchased through a private company by MPMC out of which 17,500 metric tons remained as unsold balance. This quantity was sold at half price very recently on approval granted.

Bank credit facility to the MPMC was only for a period of 3 months but MPMC has Settled as capital only a sum of US$ 5.1 Million to date, thus leaving an outstanding overdue amount of US$ 19.98 Million in the books of the private bank.

It is now reported that MPMC is awaiting liquidation and if this happens the bank will have to bear a loss of nearly US$ 19 Million.

However, the CCEM (Cabinet Committee on Economic Management) has taken up this matter on 09/11/2016 due to the involvement of public funds and have ruled that MPMC is not legally bound to repay the loan to the bank and the cabinet has granted its concurrence to this decision on 22/11/2016.

As per this decision the SLPA too will not be liable to effect any payment on behalf of MPMC and the guarantee they offered as security lapses. The loan remains as unpaid in the books of the bank for more than 3 years now.

In the meantime around 26th July, 2017, the bank in question, closed a rights issue of shares announced by them with the following noteworthy share issues to Public Bodies at the rate of Rs. 220/- per share:

EPF – Rs. 1,202,443,660/-

SLIC – Rs. 1,799,154,720/-

NSB – Rs.    353,970,760/-

ETF – Rs.      64,578,140/-

Total – Rs. 3,420,147,280/-

The total outstanding unsettled by MPMC to the bank is around US$ 19 Million. At current rate of foreign exchange US$ 19 Million is approximately equal to Rs. 3,040,000,000/- at Rs. 160/- per US$. 

Is this transaction something that warrants some kind of high level investigation as the intervening complainant thought. Or, are we to accept the fact that the happenings under the past regime continue unabated during the current regime too? OR are those acts receiving the patronage and cover-up by the Yahapalana authorities?

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