1.4B FUNDS SANS MIN. APPROVAL
Arakshaka Lanka Limited failed to obtain approval of the Ministry of
Finance for investments amounting to over Rs. 1,400 million, so said
COPE Chairman Sunil Handunetti.
From 2003, approval of the authorities has not been sought for the
budget of the institution. The approval of the Department of Public
Enterprises too has not been obtained for the organisational structure
and the cadre and procedures for recruitment and promotions. Failure to
maintain a register for fixed assets and inventory items, valued at over
Rs. 155 million is another lapse.
to the COPE report the absence of details on the location of assets,
details of assets and depreciation was another shortcoming. In addition,
the institution has not been made a public enterprise and periodic
evaluation of reports has not been carried out. COPE has requested a
report on the non-execution of these matters.
Rakna Arakshaka Lanka Limited, a fully Government owned entity had
entered into eight agreements
...with Avant Garde Maritime Limited and six of them had been cited
in the recent past and those agreements as well as the agreement entered
into on 27-01-2014 by combining the aforementioned agreements were
illegal and unacceptable. It had not been certified by lawyers nor had
it been registered. The Committee has referred the copies of these
agreements to the Attorney General seeking his opinion on their
The Committee reviewed the agreements entered into by Rakna Arakshaka
Lanka Limited with Avant Garde Maritime Limited for the implementation
of six operational projects and it was observed that the approval of the
Treasury, the Ministry of Defence and the Board of Directors had not
Having amalgamated all six agreements, an agreement had been signed
with Avant Garde Maritime Limited on 27-01-2014 and the Committee drew
its attention to the legality of the agreement.
The committee unanimously concluded that this agreement was illegal
and unacceptable. It had not received the approval of the Ministry of
Defence or the Treasury.
Meanwhile, another agreement between Rakna Arakshaka Lanka Limited
and Avant Garde Maritime Limited entered into on 20-10-2015 had been
referred to as a unanimous decision of the Board of Directors ignoring
the objections by the representatives of Ministry of Defence and
A decision had also been taken to write off Rs. 255 million due to
Rakna Arakshaka Lanka Limited from Avant Garde and measures taken to
recover Rs.843 million receivable from Avant Garde to Rakna Arakshaka
Lanka Limited as of 2014. The committee was not satisfied with the
answer given in respect of the recovery of Rs.843 million.