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Monday, July 15, 2024

Sri Lanka: USD 3.2M ‘Missing’ from Hambantota Int’l Port Group; Sent to unknown account

A financial fraud allegedly occurred at Hambantota International Port Group (HIPG), with USD 3.2 million reported missing from the company’s accounts, purportedly transferred to an unknown account in Indonesia.

The Chinese management accused Sri Lankan HIPG staffers of involvement and subsequently dismissed Chief Operating Officer Tissa Wickremasinghe and several others.

CEO of HIPG Johnson Liu sacked Wickremesinghe, Accountant Sasika Madushanka and Documentation Centre Supervisor Ajantha Ravinath without conducting an impartial inquiry at the beginning of the investigation.

They filed a complaint to CM Port, also known as China Merchants Port Group Co. Ltd. in China, detailing CEO Liu’s alleged harassment and abusive behaviour, which they claim often occurs while he is intoxicated.

The Sri Lankan staffers claimed that the Chinese are managing the accounts of HIPG, as the port operations are handled by the Chinese for the next 99 years under a lease agreement and they take instructions from the top Chinese officials at the HIPG.

USD 3.2 million, which was supposed to be a rebate for Hyundai Shipping of South Korea, has been transferred to an unknown account in Indonesia. Local staffers expressed suspicions from the beginning about how such a large rebate for Hyundai Shipping accumulated and whether this amount is accurate. Hyundai Shipping has conducted several RO-RO (roll-on/roll-off) operations at the Hambantota Port, with the rebate being a small commission they receive. However, the substantial accumulation of funds for Hyundai raises suspicion.

A complaint letter was written by HIPG local staffers to Dr. Xu Song, CEO of China Merchants Port Group Co. Ltd., at Building 2, Gongye 3 Road, Shenzhen, China, dated 7 June 2024, questioning why CEO Liu instructed the money to be transferred to Indonesia, given that Hyundai Shipping is based in Korea.

They further stated in the letter that since HIPG lost track of the funds, senior staff headed by Liu have begun a witch-hunt against the Sri Lankan staff, attempting to implicate them for the missing funds.

The Sri Lankan staffers requested China Merchant Port Group to hold an impartial inquiry against CEO Liu, General Manager Alen and CFO Kinney, as there is evidence suggesting that the GM and CFO were instructed by Liu to sign off on the transaction, which Liu ultimately approved.

Liu, on discovering that the funds were remitted to someone in Indonesia, had allegedly ‘forced’ the Head of Legal, Deshani Koralage and two other staff members to travel to Indonesia and lodge a complaint with the Sri Lankan Ambassador there. The Mission Head there is Rtd. Admiral Jayanath Colombage

Liu also rushed to lodge a complaint with the Cyber Security Division of the Criminal Investigation Department of Sri Lanka, implicating the staff of HIPG.

The Sri Lankan staffers blamed CEO Liu, citing that he harassed them using abusive language. They claim in a letter that Liu habitually harasses his staff, while intoxicated. They assert that they will not tolerate such levels of abusiveness and that it is evident Liu is attempting to shift responsibility for the missing funds onto the Sri Lankan staff at HIPG, despite clear indications that he instructed the transfer of funds.

The letter has been copied to the Minister of Ports and Shipping, the Ministry of Labour and Foreign Employment, the Chairman of Ports Authority, the Inspector General of Police, the Chairman of China Merchant Group, the COO, the Vice Chairman of China Merchant Group and the Ambassador to the Sri Lankan Mission in Indonesia.

In July 2017, the Concession Agreement (CA) relating to Hambantota Port was signed between Sri Lanka Ports Authority (SLPA) and China Merchant Port Holdings (CM Port), with an investment of up to USD 976 million on a 99-year lease. Under the agreement, CM Port holds an 85 per cent share ownership of Hambantota International Port Group (HIPG), while 58 per cent of Hambantota International Port Services (HIPS) shares are controlled by HIPG, and 42 per cent are held by SLPA. Hambantota International Port Group was officially launched on 9 December 2017.

A HIPG official confirmed there is an issue and several Sri Lankan staffers have been sacked. He did not elaborate, however.


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