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Shehan Semasinghe reveals financial irregularities at SMIB

23 Feb 2022

 
  • Bank released loans for individuals from ‘fake’ companies 
  • Loses Rs. 64.17 m between 2007-2017
  State Minister of Samurdhi, Household Economy, Micro Finance, Self-Employment, and Business Development Shehan Semasinghe yesterday (23) revealed in Parliament that the State Mortgage and Investment Bank (SMIB) was involved in financial irregularity between the period from 2007 to 2017.  According to the State Minister, the bank, as a result, had made a loss of Rs. 64.17 million.  The State Minister made this statement in response to a question raised by MP Jagath Kumara as to whether there was any irregularity, corruption, or illegal activity in the SMIB from 2015 to 2019. During the period from 1 September 2006 to 31 March 2017, the bank had reportedly issued 48 loan files to 47 employees of two companies under the fake names of A&D Solutions and Master Packaging (Pvt.) Ltd.  In addition to this, during the period from 30 March 2017 to 30 April 2017, Rs. 2.75 million had been released as loans to two individuals. It was later revealed by the State Minister that the money was obtained after submitting false information and documents, and a preliminary investigation was launched against the bank officials who recommended and released the loan. Below is a list of fake finance companies and businesses that have obtained relevant loans: 
  • A&D Data Solutions had released Rs. 64.04 million. The number of loan files opened were 44. The total amount settled as at 31 December 2021 was Rs. 5.25 million 
  • Four files from Master Packaging (Pvt.) Ltd. had been released. The loan disbursed was Rs. 4.3 million. The collected loan amount is merely Rs. 1.68 million at the moment, excluding the interest
  • From Autotech (Pvt.) Ltd., the loan amount released was Rs. 2.75 million. The loan amount currently settled is Rs. 0.78 million 
Due to each of the above, the bank has lost Rs. 64.17 million.  State Minister Semasinghe stated that 20 formal preliminary investigations have been conducted against 16 accused officers.  As of 1 February 2022, 14 preliminary investigations have been completed and preliminary investigations against six accused officers are still in progress. Two officers have been suspended. Preliminary investigations are still ongoing. Seven officers have been demoted and transferred. A complaint was lodged with the Criminal Investigations Department (CID) on 16 October 2017 regarding the incident.  Further, a case has been filed in the Fort Magistrate’s Court on 17 November 2017 under case number B/8255/18 against the accused bank officials and one identified outsider in connection with this criminal act.  He added that disciplinary action will be taken against all the accused officers after the completion of the preliminary investigation and measures have already been taken to prevent such scams in the future.

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