2.1 C
Tuesday, February 27, 2024

More shocking scams at CEYPETCO

The Auditor General in a highly critical report has drawn the attention of the parliamentary Committee on Public Enterprises (COPE) as to how the top management of the Ceylon Petroleum Corporation (CEYPETCO), one of the major semi government institutions which is in deep financial trouble had among other financial misdeeds misappropriated funds, made false tax declarations, and excessive payments to lawyers and advertisers.

In his 2009 report, which is being analysed by COPE headed by Senior Minister D. E. W. Gunasekera, the Auditor General pointed out that the CEYPETCO has failed to produce the title deeds for the Sapugaskanda mini terminal land valued at Rs.67 million. The existence and recoverability of the investment aggregating to Rs.55.5 million could not be determined due to the lack of evidence. “Twenty five acres of land valued at Rs.259 million at Muturajawela had been shown as an asset in the ledger. However there are no title deeds or documents to establish land ownership by CEYPETCO.

This is a highly suspicious transaction,” the report said. No evidence had been made available regarding the assets prior to December 31, 2002, reflected under property, plant and equipment. As result, the ownership, existence and completeness of such assets could not be determined in audit. Sufficient evidence was not made available to determine the recoverability of the Exercise Duty amounting to Rs.714 million from the General Treasury. Services of private lawyers had been obtained at a higher rate without obtaining prior approval of the Auditor General. The amount paid to lawyers during the year amounted to Rs.5 million.

The corporation had not included certain taxes which are not recoverable from tax authorities in determining the cost of purchase. Further, it was observed that the advertising cost of Rs.2.9 million had been included in the manufacturing cost and this has violated the provisions of SLAS inventories, the Auditor General said.

He said the corporation had paid PAYE tax from its own funds on behalf of the corporation employees contrary to the circular instructions. PAYE tax so paid from 2000 – 2009 amounted to a staggering Rs.777 million. Surprisingly and mysteriously the CEYPETCO has paid tax on PAYE tax. Further PAYE tax had not been paid in 2008 and 2009 which amounts to Rs.147 million and 148 million respectively. Officers who were not entitled to assign motor vehicles had been assigned with motor vehicles on the approval of the Board of Directors or the Chairman.

As such eight officers had been paid a sum of Rs.1.8 million as fuel and travelling allowance in 2009. A parliamentary source said considering the enormity of the misappropriation and mishandling of the CEYPETCO funds, the COPE has decided to go into a detailed investigation and called officials with all relevant documents to appear before COPE at the next hearing.

The COPE had been highly critical of the present CEYPETCO management and had instructed to recruit a CEO, CFO and a Financial Controller in addition to the establishment of a Treasury Management Unit to monitor the proper management of finance, the source added. Ironically, here is a state institution with receivable debts of Rs.84 billion and with estimated losses of Rs.14 million for this year and still without responsible officials to control the financial activities, the source said. (Sandun A. Jayasekera)



Latest news

Related news