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Legal actions underway 

25 Apr 2021

  • Nat. Wealth Corp./Nat. Wealth Securities Corp. probed 

  Following the Auditor General’s report presented to the Parliamentary Committee on Public Enterprises (COPE) regarding the losses incurred by the Mahapola Scholarship Trust Fund, it was revealed that legal action has been initiated against the relevant parties.  Speaking to The Sunday Morning, Mahapola Scholarship Trust Fund Director Parakrama Bandara said: “We have taken legal action against the companies in question, as instructed by the COPE in January, and have also sent letters of demand to the said companies in order to recover the losses. Other than the losses highlighted in the audit report, we are not incurring any further losses.” Bandara also noted that although one of the main matters was the loss of Rs. 673 million incurred through the Mahapola Online Lottery Scheme due to deviating from the procurement procedure, investigations were also carried out over the agreements made with the Sri Lanka Information Technology Company (Limited by Guarantee), and regarding the investments made by the two companies under the Mahapola Trust Fund; namely, the National Wealth Corporation and the National Wealth Securities Corporation.  COPE Chairman Prof. Charitha Herath said: “Although it would not be a problem to liquidate after punishing the perpetrators, it would not be appropriate to liquidate those institutions without a proper investigation into the frauds. Therefore, the liquidation should be delayed until those irregularities are properly investigated.”  The COPE had recommended a proper study on the irregularities with regard to the National Wealth Corporation and the National Wealth Securities Corporation, under the Mahapola Trust Fund, and ordered that the heads of the said institutions be summoned before the COPE forthwith.  The officials who attended the investigation had told the Committee that the Cabinet of Ministers had approved the liquidation of those Institutions, as they were running at a loss. In the recent special report presented by the COPE, the matter of financial losses incurred by the Mahapola Online Lottery Scheme as a result of financial irregularities, and the mismanagement of the Fund was accounted to be at Rs. 673 million.  The special audit report indicated that the Trust Fund had been deprived of the said amount due to the selection of an institution to maintain the online lottery by deviating from the procurement procedure.  The investigations however concluded that the procurement committee that selected the institution for maintaining the lottery, and the evaluation committee, as well as the institution that maintained the lottery, should be held accountable for the losses.

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