Ravi Karunanayake to report Hyatt project malpractices to FCID

 

The finance ministry is to make a formal complaint to the Police Financial Crime Investigation Division (FCID) on the large scale misappropriation of funds and malpractices said to have taken place in the construction of the Hyatt Hotel projects in Colpetty and Hambantota during the last regime.

The ministry said in a statement that the complaint would be lodged on the instruction of Finance Minister Ravi Karunanayake.

The Hyatt hotel Project is owned by M/S Canwill Holdings Ltd which is a fully government owned public enterprise. 46 per cent of its shares are held by Sri Lanka Insurance while the rest is equally shared by the EPF and the Litro Gas Company under the finance ministry, each holding 27 per cent of the shares.

Soon after the new government came into office, the Canwill Holdings’ new management conducted a forensic audit on the affairs of the company.

The out sourced forensic audit firm has uncovered mass fraud and malpractices inclusive of the doubling the initial cost of the construction to Rs. 27 billion from Rs 13 billion. Canwill Holdings was previously managed by former President’s Chief of Staff Mr. Gamini Senarath who has also held several other high profile offices in several other public enterprises including Litro Gas which is a stake holder of the owning company of the Hyatt Hotel Project.

According to present Litro Gas Lanka Ltd Chairman Mr. Shalila Moonasinghe, who is also the Canwill Holdings Director, a host of irregularities and mismanagements have been highlighted in the forensic audit which warrants further investigations by police.

The forensic audit report points out that the company of which Mr. Senarath was at the helm has had no regards to the laid down tender procedures and has engaged in surreptitious transactions blatantly violating all norms and regulations.

A payment of Rs.10 million has been made to a lawyer without any agreement, Rs.16 million losses were reported in steel purchases, Rs.80 million payment to a fitting supplier without the Board of Directors approval and entering into an international tender for USD 37 million the day before January 8, Presidential election are among the host of irregularities unearthed by the forensic audit.

The Hyatt Hotel Project has two components with other being the construction of another hotel in Hambantota. It has been revealed that Rs.300 million has been spent from the Rs.5 billion earmarked for the Hambantota Hyatt Project even without the foundation stone being laid for the project. (DM)