The Rs.145 million used in making the initial payment of Rs.16.5 million and thereafter to pay the monthly loan installment of Rs.11 million for the controversial purchase of the Monarch Residency Penthouse in Colombo by a company owned by Minister Ravi Karunanayake's family, has no origin nor has it been accounted for according to what was revealed at the PCoI today.
Testifying at the inquiry, Chief Financial Officer of the Global Transportation and Logistics Pvt Ltd (GTLPL), Mr B.R. Chinnaiya explained the manner in which the Monarch Residencies Penthouse had been purchased.
The witness, who has 36 years of experience in the banking field had been also appointed to the Board of Directors of the BOC in 2015 by the then Finance Minister Ravi Karunanayake for a period of one year.
* ASG Yasantha Kodagoda hints at money laundering
* Rs.145 million unaccounted money in GTLPL Chairman Lakshmi Kanthan’s safe
* GTLPL Chief Financial officer B.R. Chinnaiya makes startling revelation at inquiry
It was earlier revealed that Minister Karunanayake and his family occupied a Penthouse at the Monarch Residencies for eight months on a lease basis and the monthly lease rental of Rs.1.45 million was paid by Arjun Aloysius.
Subsequently the penthouse had been purchased for Rs.165 million by GTLPL, in which Minister Karunanayake’s wife Mela and daughter Onella were directors.
According to the witness, the GTLPL has two major share holders, 30% acquired by a foreign company headed by the GTLPL Chairman and 70% owned by a company known as OSM Holdings, in which Ms. Karunanayake and their daughter Onella are directors.
The witness said he was instructed by these two directors to obtain a loan and purchase the Penthouse in July 2016 for the use of the Chairman and the family or to be uses when foreign guests are required to be accommodated.
The witness said he then negotiated with the Seylan Bank for the loan but had no negotiations with the price at which the GTLPL would buy the apartment.
It was told that there was an advance payment of Rs.16.5 million had to be paid to the owner of the Penthouse.
However, it was revealed during the evidence that the GTLPL did not have that much money in there account at the time.
He said directors Ms Karunanayake and daughter Onella, instructed him to get the Rs.16.5 million from the Chairman’s safe at the company and pay the initial payment as they had obtained his permission to do so. Mr. Chinnaiya said there was Rs.25 million in the Chairman’s safe.
Later, a loan of Rs.150 million had been granted by the bank on a mortgage to buy the Penthouse.
It was also revealed that the witness had told the bank that the Company wished to buy the Penthouse to rent it out and the rental payment would be directly allocated into the repayment, though it never happened.
The GTLPL agreed with the bank to repay the loan in 15 installments of Rs.11 million each.
The witness said nine installments had been paid so far using the liquid cash available at the Chairman’s safe at the GTLPL.
In a shocking revelation, when he was questioned about the origin of the money, the witness said Chairman ‘Lakshmi Kanthan’ who resides in Britain had arrived at the Company on two occasions in February 2016 and 2017 and dumped cash amounting to Rs.145 million in the Chairman's safe.
The witness said that the Chairman had handed him Rs.70 million to be kept in the safe in February 2016 and later another Rs.75 million had been given in February 2017.
It was revealed that the witness had accepted the cash on the two occasions and it had not been supported by any documentation or receipt issued to Mr. Kanthan neither were there any entries in the GTLPL accounts books regarding these two cash inflows.
It seemed that the Commission and the Additional Solicitor General Yasantha Kodagoda who led the evidence were shocked with the comment of the witness and continued to question him about the origin of the money.
The witness said he never questioned his Chairman Kanthan over how the money was generated.
Justice Prasanna Jayawardena and Justice KT Chithrasiri asked the witness on what basis, being a prudent banker himself, had accepted the money by not verifying its origin. And the Commission also questioned the possibility of the practice that such a large amount of money being kept in a safe without allocating it to the business.
ASG Kodagoda was also of the view that there could be criminal aspects, such as money laundering, deriving through such practices.
On being questioned by the ASG, the witness said the Chairman's safe was of medium size and that he had brought the money in two parcels to be placed in the safe.
Adding some amusement to the query, ASG Kodagoda commented, “the chairman’s safe is like a Perpetual Treasure Box”.
Refering to the statement of accounts presented by the witness of the GTLPL, Justice Jayawardena also questioned the witness relating to the Rs.145 million given by the chairman. The witness was unable to find such an entry in the company's statement of accounts.
The ASG finally explained to the commission that the initial payment of Rs.16.5 million and the installment of Rs.11 million for nine months had been paid from the money (Rs.145 million) placed in the chairman’s safe by Mr. Kanthan himself, while the origin of that money was not reflected in any documentation. (Shehan Chamika Silva)