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Massive revenue losses blamed on Parliament



Customs, Motor Traffic faulted, Rs 3 bn scam revealed

By Shamindra Ferdinando

The first report of the Committee on Public Accounts (COPA) for the first session of the 9th Parliament has revealed that the Treasury lost billions of rupees annually due to the failure on the part of Parliament to update laws against corruption and irregularities involving state institutions and the private sector.

The COPA has named the Sri Lanka Customs and the Department of Motor Traffic as two key institutions responsible for the pathetic situation.

The Customs and Motor Traffic Departments come under the purview of the Finance and Transport Ministries. Parliament is in charge of overall finances.

COPA Chairman Prof. Tissa Vitharana, National List member of the ruling Sri Lanka Podujana Peramuna (SLPP) on Tuesday (20) presented the report to the parliament.

COPA consists of Udaya Gammanpila, Duminda Dissanayake, Dayasiri Jayasekara, Lasantha Alagiyawanna, (Dr) (Mrs) Sudarshini Fernandopulle, Shehan Semasinghe, Prasanna Ranaweera, Tissa Attanayake, (Prof) Tissa Vitharana, Harin Fernando, Niroshan Perera, Faizal Cassim, Ashok Abeysinghe, Buddhika Pathirana, K. Kader Masthan, Sivagnanam Shritharan, (Dr.) Upul Galappaththi, B. Y. G. Rathnasekara, Weerasumana Weerasinghe, (Prof.) Ranjith Bandara, Mohomad Muzammil, and Dr. (Mrs.) Harini Amarasuriya.

The COPA has dealt with how successive governments conveniently had turned a blind eye to organized scams that deprived the Treasury much needed revenue especially at a time the cash-strapped government was struggling to cope up with deteriorating economic situation.

The LSSP veteran told parliament that those who could pay taxes took advantage of loopholes in the law and existing systems to deprive the Treasury of huge amounts of money.

The one-time minister pointed out how those enterprises which could pay taxes without difficulty exploited an opportunity to appeal thrice and then move court against the Inland Revenue to delay payment of taxes, further.

Recommending that the number of appeals should be reduced to one, Prof. Vitharana questioned the rationale in allowing various enterprises to evade paying taxes by exploiting the existing procedures.

Interestingly, COPA presented its report ahead of the vote of no-confidence motion against Energy Minister Udaya Gammanpila over the increase in fuel prices– a development the lawmaker blamed on extremely difficult economic situation.

Prof. Vitharana said that COPA made recommendations meant to recover taxes due to the Treasury and streamline the process. The report revealed massive scams over a period of time in the absence of scrutiny at any level. It reiterated that the Customs and the Department of Motor Traffic caused colossal losses and were the worst culprits.

COPA revealed that the Treasury had been denied a staggering Rs 3 bn in taxes in the import of Toyota Hilux Smart Cabs as a result of the Customs fraudulently releasing 3,000 vehicles under a different category. Each vehicle had been taxed Rs 1 mn less than it should have been, COPA pointed out adding that in another instance 44 vehicles imported under the category of special purpose vehicles had been subsequently registered as dual purpose vehicles resulting in a further loss of Rs 1.3 bn. According to the report the import of 44 vehicles had taken place during 2010-2019 period.

Department of Communications, Parliament yesterday (21) briefed the media of the salient points in the COPA report.

COPA also dealt with how the Customs caused a loss of Rs. 6.1 bn to the Treasury during 2013-2016 in imports made by two leading palm oil companies.

Former Minister and one-time Chairman of COPE (Committee on Public Enterprises) Dew Gunasekera told The Island that the government should make a genuine effort to streamline the revenue collection process by taking tangible measures to curb corruption and irregularities in the overall process.

The veteran Communist said that the country’s economy was in such a mess and turmoil the government couldn’t afford to turn a blind eye to waste, corruption, irregularities as well as negligence that caused debilitating losses to the national economy. If those lawmakers realized the gravity of the situation they wouldn’t have caused an uproar when Energy Minister Udaya Gammanpila announced the fuel price hike on June 12, Gunasekera said.

Gammanpila’s statement as well as President Gotabaya Rajapaksa’s address to the nation in which he acknowledged the daunting task in meeting annual loan repayments amounting to USD 4 bn, reflected the ground situation.


Police detain Bathiudeen’s wife, father-in-law and another suspect over domestic aide’s death



Former Minister Rishad Bathiudeen’s wife, father-in-law and another suspect have been detained for interrogation in connection with the death of the 16-year old domestic aide.

“They are being held for 72 hours for further questioning”, police said.

The suspects taken into custody were identified by police as that 46-year old Sheyabdeen Ayesha, her father  70-year-old Mohammed Sheyabdeen and the broker who brought the girl to work as a domestic aide in Bathiudeen’s house.

The victim, a resident of Dayagama Estate off Talawakelle, was admitted to the Colombo National Hospital on July 3 with severe burn injuries. She died on July 15.

Police have already recorded the statements of more than 20 persons in connection with the girl’s death.

Police have also questioned two women aged 22 and 32 from the Dayagama area, who earlier served as domestic workers at the former Minister’s house.

One of the women had claimed she was sexually harassed by Bathiudeen’s brother-in-law from 2015 to 2019 at the former Minister’s residence in Colombo.

Subsequently, police also arrested the 44-year old Sheyabdeen Ismadeen, brother-in-law of the former Minister.

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Contamination fears propel Lanka Sathosa to recall Chinese-made canned fish stocks



After procurement from Colombo port for Rs. 50mn

by Suresh Perera

A substantial stock of “confiscated” canned fish Lanka Sathosa procured from the Colombo port at a cost of around Rs. 50 million has been recalled from the market following public complaints that the Chinese-manufactured products were unfit for human consumption.

The five 20-foot container loads of 425g ‘Kitchen King’ Mackerel canned fish of the Scomber japonicus species, which were lying in the Colombo port as “abandoned cargo” after forfeiture by the Customs in October last year, was purchased by Lanka Sathosa recently to be sold at a concessionary price through its chain of supermarkets.

“We have now withdrawn the whole stock from our supermarket shelves as there were customer complaints that the canned fish was not fit for consumption”, says Lanka Sathosa Chairman, Rear Admiral (Retd) Ananda Peiris.

The products were injected into the market after clearance by the Food Control Unit of the Health Ministry following quality testing by the Sri Lanka Standards Institution (SLSI), he said.

“As there’s a shortage of canned fish in the marketplace, we promptly distributed the stocks to our supermarkets island-wide to be sold at Rs. 290 each. We have now asked the outlets not to sell them to customers because of the quality issue that has emerged”, the Chairman noted.

“We have no option now other than to return the consignment and seek a refund from the Ports Authority”, he said.

Onions, potatoes, lentils and other food commodities, which are either confiscated by the Customs or remain uncleared by importers, are generally procured by Lanka Sathosa to be sold at concessionary prices to customers, Peiris explained.

“In terms of a Cabinet decision, the consignments are auctioned only if we don’t procure them”.

The stock of canned fish had been forfeited as the owner had not cleared it for three months, he said.

“Lanka Sathosa appears to have opened a can of worms as the 9,200 packs of canned fish had arrived aboard a vessel, which sailed into Colombo on October 29 last year, a source knowledgeable of the operation, said.

Listing out the relevant reference and batch numbers of the consignments, the source said the Chinese products were manufactured on 09/10/2020 with a 09/10/2023 ‘expiry date’.

This means the stocks had been in the Colombo port for the past nine months, and had turned rancid despite a 2023 ‘expiry date’, the source asserted.

Consumer Affairs Authority (CAA) officers had raided the Lanka Sathosa outlet at Moneragala following complaints that canned fish was being hoarded.

“We found stocks in storage, but was told by officers there that instructions were received to withhold the sale of the ‘Kitchen King’ products until they were re-labeled”, CAA’s Executive Director, Thushan Gunawardena said.

As the importer was not in favor of Lanka Sathosa marketing the products under its original brand name, a sticker was affixed to obscure it, Peiris clarified.

Under Section 10 of the Consumer Protection Act, re-labeling a product constitutes an offence, Gunawardena pointed out.

Acting on a complaint, public health inspectors have taken a sample of the canned fish from the Mawanella outlet for testing, the Lanka Sathosa chief further said.

Responding to questions raised by the CAA, the SLSI said its officers had collected samples from the five containers following requests by the Ports Authority and Lanka Sathosa.

As the original importer had not submitted any documents to the SLSI so far, the need for sample collection didn’t arise, it said.

The CAA has further queried whether the SLSI was aware of the purpose the test results were required at the time samples were received.

The SLSI has clamped down on the import of substandard canned fish with an intolerable level of arsenic, particularly from manufacturers in China.

In a news report headlined “SLSI cracks the whip on substandard Chinese canned fish imports”, The Sunday Island of March 21, 2021 quoted the institution’s Director-General, Dr. Siddhika Senaratne as saying that fish harvested for canning has a high arsenic content as the sea in China is heavily polluted and dirty due to lax environmental laws.

“It is true that there is a scarcity of canned fish in the market because supply cannot meet the demand. However, this does not mean we should allow our people to be poisoned through arsenic-laden imports”, she was quoted saying in the news report.

With the SLSI stipulating a maximum arsenic tolerance standard of 1.0 milligram per kilogram of fish, a filtering mechanism is now in place to shut out substandard imports, she assured at the time.

Asked whether the consignment of Chinese canned fish procured by Lanka Sathosa was earlier detained due to its high arsenic content, Dr. Senaratne declined comment saying she’s “not allowed to talk to the media”.

“The DG wouldn’t want to be dragged into another controversy”, an official remarked, referring to the furore over her claim of toxins in foodstuffs, which she, however, declined to identify at the time.

At a time canned fish imports from China have been off the shelves since SLSI’s rigid monitoring of tolerable arsenic levels began, industry players expressed consternation on how a stock, which had been lying in the Colombo port for months, was suddenly given the nod for procurement by Lanka Sathosa.

With the scarcity of canned fish products in the market pushing up demand, will an importer abandon his consignments unless there was something rotten somewhere?, they asked.

“It is too far-fetched to imagine that they got the documentation wrong as these importers are seasoned campaigners in the game”.

It is apparent that Lanka Sathosa had not done its homework before jumping at the idea of procuring the consignment because Chinese-made canned fish had remained virtually out of bounds for many months because of fears of contamination, they said.

Importers didn’t want to risk their investments as a high arsenic level meant the consignments were either destroyed or ordered to be re-exported, they added.

“That’s why local products now dominate the market with a brand from Thailand also no longer available”.



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United States gives Sri Lanka 500,000 coronavirus rapid tests



The United States had donated 500,000 Rapid diagnostic tests to Sri Lanka worth Rs. 300 million to help the country fight Coronavirus, the US Agency for International Development said.

“By enabling rapid detection of the virus, these tests donated by the American people will save lives and protect public health in Sri Lanka,” USAID Mission Director to Sri Lanka and Maldives, Reed Aeschliman said in a statement.

“This donation builds on previous U.S. support to the Sri Lankan government’s pandemic response and reflects our strong, long-standing partnership.”

US has also given 1.5 million moderna vaccines to Sri Lanka.

The tests are simple to use and enable fast, decentralized access to direct testing. They do not require additional equipment or specialized laboratory access, which helps achieve high testing coverage.

The United States has also given of 200 ventilators to Sri Lanka’s health system.

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