Rs. 118 b loss as rice sold as animal feed!

Jul 17, 2016

The state has incurred a Rs. 118 billion loss due to the sale of 272,000 mt of imported rice as animal feed.

Lak Sathosa had imported the consignment during the previous regime through a cabinet paper by the then minister Johnston Fernando in May 2014, but it had been blacklisted as being unsuitable for consumption.

 

The attorney general has investigated a related complaint received by the president.

 

The racketeers are attempting to get the investigating officer transferred as the preliminary audit report into the scam is nearing completion. 

 

Lak Sathosa had given the job of coordinating the rice consignment to a businessman by the name Rajan of Liverpool Company of Colombo Pettah, and paid him a Rs. 1,500 million advance.

 

The audit says he is to be paid a further Rs. 300 million.

 

The relevant cabinet paper had approved the importation of only 25,000 mt from Bangladesh and 50,000 mt from India, but as many as 272,000 mt had been imported at a price of Rs. 35 – Rs. 40 per kilo.

 

Lak Sathosa had no facilities to store the imported consignment and private storage facilities at Mabima, Welisara, Pethiyagoda and Seeduwa had been used for the purpose.

 

Then, the racketeers had got PHIs to certify the rice was not fit for consumption and to approve them as animal feed.

 

They had sold the lot at Rs. 22 per kilo to Prima Company, which had used it to produce noodles, the audit reveals.

 

The audit also notes only five per cent of the consignment was unfit for consumption, and its expiry period is November 2017.

 

Auditor general Gamini Wijesinghe refused to give details, saying the investigation was still underway, and stressed the investigating officer would be retained.

 

The chairman of Lak Sathosa said the decisions for importation and sale of rice are taken not by his institution, but by the subject ministry, ‘Sathhanda’ reports.