COPA scans EPF losses
Rs.6.3 bn between 2010 and 2013
Cabinet approval granted for failed investment
Saturday, December 9, 2017 - 01:05
A number of investments made by the Employees’ Provident Fund (EPF) in 2010 and 2013 which resulted in impairment losses of Rs 6.3 billion was questioned by the Committee of Public Accounts (COPA).
The latest COPA report tabled in Parliament yesterday revealed that the EPF had made an investment of Rs.500 million in SriLankan Airlines in July 2010, another investment of Rs. 810 million in a hotel company in May 2010, and another investment of Rs. 5 billion in a new hotel complex at the end of 2013, but those failed to make any profitable gains to the Fund.
The said amounts had been written off as impairment losses in the financial statements. The EPF authorities had told the Committee that Cabinet approval has been granted to restructure the activities related to the Fund.
The report also stated that Rs 2.5 billion and Rs 5.2 billion worth of investments were written off in 2015 and 2016 respectively as losses.
The EPF authorities had been directed to formulate and submit a comprehensive report on those write offs clearly categorizing them as complete losses and losses incurred as a result of impairment.
“Having observed the deficiencies in investments made by the Fund, the Committee directed the authorities to conduct a feasibility study before deciding on any investment in future and to establish a transparent and standardized methodology for that purpose,” the report stated.
The COPA requesting the details on investments made by the EPF has asked for the investigation report of the Central Bank Monetary Board in that regard. It has also queried on the investment of Unit Trusts by the EPF during a period of seven years from January 2010 – December 2016.
The report also stated that the EPF in 2016 had purchased a lesser volume of bonds from the primary market which has a higher yield, while a greater volume of bonds had been purchased from the secondary market which has a lesser yield, depriving the members of the Fund a massive financial gain.
The Central Bank Governor had told the Committee that an internal investigation is being carried out on the purchase of bonds by the EPF in 2016.
With regard to the Foreign Affairs Ministry, the report also highlighted that over Rs 310 million remained unsettled for travelling expenses, rent advances and other advances with relevance to foreign missions. The Ministry Secretary had told the Committee that the attention had been paid to appoint a committee to investigate in that regard and issue a circular through the Foreign Administration Unit.
With reference to the National Museums Department, the report has highlighted that no proper procedure has been implemented to date to ensure the protection of antiquities since the robbery t that took place in 2012. “Despite the lapse of a period of five years since that robbery, no action has been taken so far to properly install a security camera system. Existing CCTV system has a number of weaknesses such as the inability to capture scenes in the dark. It has been defunct by the time the robbery happened.
The report contained the findings on 36 institutions probed during the period from January to May 2017.
The latest COPA report tabled in Parliament yesterday revealed that the EPF had made an investment of Rs.500 million in SriLankan Airlines in July 2010, another investment of Rs. 810 million in a hotel company in May 2010, and another investment of Rs. 5 billion in a new hotel complex at the end of 2013, but those failed to make any profitable gains to the Fund.
The said amounts had been written off as impairment losses in the financial statements. The EPF authorities had told the Committee that Cabinet approval has been granted to restructure the activities related to the Fund.
The report also stated that Rs 2.5 billion and Rs 5.2 billion worth of investments were written off in 2015 and 2016 respectively as losses.
The EPF authorities had been directed to formulate and submit a comprehensive report on those write offs clearly categorizing them as complete losses and losses incurred as a result of impairment.
“Having observed the deficiencies in investments made by the Fund, the Committee directed the authorities to conduct a feasibility study before deciding on any investment in future and to establish a transparent and standardized methodology for that purpose,” the report stated.
The COPA requesting the details on investments made by the EPF has asked for the investigation report of the Central Bank Monetary Board in that regard. It has also queried on the investment of Unit Trusts by the EPF during a period of seven years from January 2010 – December 2016.
The report also stated that the EPF in 2016 had purchased a lesser volume of bonds from the primary market which has a higher yield, while a greater volume of bonds had been purchased from the secondary market which has a lesser yield, depriving the members of the Fund a massive financial gain.
The Central Bank Governor had told the Committee that an internal investigation is being carried out on the purchase of bonds by the EPF in 2016.
With regard to the Foreign Affairs Ministry, the report also highlighted that over Rs 310 million remained unsettled for travelling expenses, rent advances and other advances with relevance to foreign missions. The Ministry Secretary had told the Committee that the attention had been paid to appoint a committee to investigate in that regard and issue a circular through the Foreign Administration Unit.
With reference to the National Museums Department, the report has highlighted that no proper procedure has been implemented to date to ensure the protection of antiquities since the robbery t that took place in 2012. “Despite the lapse of a period of five years since that robbery, no action has been taken so far to properly install a security camera system. Existing CCTV system has a number of weaknesses such as the inability to capture scenes in the dark. It has been defunct by the time the robbery happened.
The report contained the findings on 36 institutions probed during the period from January to May 2017.
