Powering Ceylon Electricity Board:

Auditors to shed light on irregularities, malpractices

By Manjula FERNANDO

Power and Energy Minister Patali Champika Ranawaka in an interview to explain the recent action on LECO General Manager Dr. Susantha Perera says he has begun the dangerous task of cleansing the CEB and LECO institutions of corruption and fraud in line with the vision to make CEB continue as a profitable public enterprise.

He says he has raised a hornet's nest by launching this operation that will investigate each and every project under the CEB and LECO by a highly specialized technical audit team headed by Prof. K.K.Y.W. Perera.

"Some elements within the CEB get scared of being exposed," Minister Ranawaka said adding that it was a very powerful lobby that no one wishes to meddle with. "I am aware of the dangers but somehow the truth has to be revealed."

The Minister invited the powerful CEB trade unions to join forces with him in this effort, for the interest of the workers and the country.

Excerpts of the interview:

There was a case of misappropriation of funds in LECO in 2008 and 2009. In 2009 Power and Energy Ministry has appointed a committee to look into this and probe the misappropriation of funds.

They found nearly Rs. 600 million worth of funds that belong to LECO has been misappropriated during various transactions from land acquisition, purchasing of vehicles to construction of buildings.

But the committee merely made recommendations. No concrete action was taken to bring the perpetrators to book. The then Secretary of the Ministry of Power and Energy has written to the Registrar of Companies to take some action, since LECO was registered as a company.

The intention was to bring the culprits to book through the only way they thought was possible, via the Registrar of Companies. It was a massive amount of public money that had been misappropriated by the LECO board.

I assumed duties in May 2010. I appointed a single member committee headed by former permanent Secretary to the Ministry M.A.R.D. Jayatilleke to review the report. He made recommendations as to what action to be taken against those charged with misappropriation of funds. There were concrete recommendations and we took action based on his report.

The Bribery and Corruption Commission was duly informed. We also informed the CID to investigate as to whether a criminal offence has been committed.

They found there was concrete evidence pointing to fraud. They submitted charges against the entire board members of the LECO.

When I selected the new board none of the former members with charges of corruption committed during 2008-2009 was re-appointed. Only Dr. Susantha Perera remained.

At the time Dr. Perera was a board member cum general manager of LECO. He was released from CEB to take up the position of a board member in LECO. But he violated this agreement by functioning as the general manager in addition to the position of a board member.

The releasing letter clearly spelt out that he has to resign from the Director post if he was going take up another position in LECO.

But he did not do that. That was the first irregularity that he has committed as far as the CEB was concerned. This duel appointment was made in 2008.

We took another decision to initiate, our own process through LECO to investigate the misappropriation case. A Court case was filed by the CID and a charge sheet was formulated.

Pending disciplinary action by LECO, the service of Dr. Susantha Perera was suspended. The point was that if he was allowed to function as the general manager or a Director he could have influenced or obstructed the process. To facilitate the investigation we interdicted him. In the meantime the internal auditor who probed transactions concerning land acquisition re-affirmed that a staggering Rs. 250 million had been wasted due to misappropriation of funds by the former board.

All the trade unions raised this issue with LECO management and MP Vasudeva Nanayakkara raised it in Parliament demanding a national probe.

Upon these findings the new LECO board gave the choice for Dr. Perera to revert to CEB until the investigation is over but he refused to do so and went to Court against the move to send him back to CEB.

The Court gave him an interim order. Later LECO board fought against it and got the interim order lifted. In the subsequent order the Court clearly spelt out that LECO could go ahead with the disciplinary action while he remained interdicted to facilitate the investigation.

In Court, when the proposition was made, he refused to go back to CEB. However, after the verdict he simply went back to CEB and assumed duties going against the Court ruling. This is unethical and illegal.

The CEB GM is an ex-officio member of the LECO board. She was fully aware that Dr.Susantha Perera was interdicted by the LECO board. The decision was taken by the board where she was also a member. She was fully aware of the situation, nevertheless she facilitated his return.

Moreover, Dr. Susantha Perera was released by the CEB board, therefore if he was re-joining, the CEB board has to be informed. This practice has been disregarded at this particular instance by the GM for some reason. Later, despite being under the purview of the Power Ministry, she has written to the Public Administration Ministry seeking to clarify the matters with regard to Dr. Perera's revert to CEB. She has over-stepped her powers.

Trade unions, especially the Engineering trade union requested me to reinstate Dr. Perera. I refused to do so since it may reflect badly on the disciplinary code of the CEB and LECO. Besides there is a case before courts now and it needs to be concluded for any action on our part.

But there is nothing to stop Dr.Perera from going to Courts and fighting back through legal channels if he wishes to do so. On the other hand we could expedite the disciplinary inquiry and the things within our purview. But we simply cannot backtrack and reinstate him due to pressure from Trade unions. The charges against him are very serious.

Unfortunately the trade unions have got the wrong end of the stick and are making various allegations. They demand the Chairman, Vice Chairman and the working director should be removed from their posts.

They can level any charges against these three people but it has to be backed by proof. If there is proof of wrong doing, malpractice and irregularities, we are prepared to investigate and take action. If found guilty to the charges I will definitely remove them. But without any proof, we cannot take action.

No one can challenge the constitution. An Act passed in Parliament gives me, as the Power and Energy Minister clear cut powers to appoint the CEB board. It's the constitution and the people's sovereignty that these trade unions are challenging.

During the present Chairman's one-year tenure the CEB became a financially viable institution after 15 years. I cannot remove a Chairman who has made an outstanding contribution to lift the CEB to such a level, in order to appease a trade union which is backing one of their members charged with malpractice.

Their reason to ask for resignation is the action against the CEB General Manager and Dr.Susantha Perera. The Chairman asked for explanations from the GM for accepting Dr. Perera's reverting when the CEB board has taken a decision to suspend his services pending the LECO investigation.

Dr. Perera is a current member and one of the ex-Presidents of the Engineering Trade union. He masterminded the general strike in 1997. His action to assume duties in CEB was against the Court ruling. He has acted in contempt of court. We will raise this issue at the next court hearing.

The Bribery Commission is doing their own investigation and our action is not a witch hunt. It is not selective. We have taken action against all the members of the former board and the process was initiated during the tenure of my predecessor.

I will not allow any person to misappropriate public funds within the Power and Energy Ministry. Malpractices and frauds will not be tolerated especially in the high technical tier of officers.

We have initiated an investigation on the Northern power project in Jaffna. We have a very clear cut case there. We have put together an expert technical audit team within the Ministry headed by Prof. K.K.Y.W. Perera. All the sectors from top to bottom will be throughly analyzed by this team. No stone will be left unturned.

Hence, we will not allow any trade union, no matter how powerful they are to obstruct this 'cleansing program'.

That kind of attitude is needed to achieve our objective of making CEB a self-sufficient public enterprise that can also make profits. We have already been able to salvage its previous image as white elephant.

I understand that this is a very powerful lobby. Power industry is a profitable business in the world. In Australia Prime Minister Kevin Rudd was ousted by this lobby because he was bold enough to intervene. The same fate befell on former Japanese Prime Minister for meddling with gas industry moguls.

It is a very dangerous threat but we have to reveal the truth.

Some elements within CEB get scared of being exposed.

The trade unions, if they are actually interested in safeguarding the interests of workers, should join hands with us in exposing corruption instead of rocking the boat and trying to safeguard interests of corrupt officials".