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More shocking scams at CEYPETCO

5 September 2011 02:30 pm - 45     - {{hitsCtrl.values.hits}}

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The Auditor General in a highly critical report has drawn the attention of the parliamentary Committee on Public Enterprises (COPE) as to how the top management of the Ceylon Petroleum Corporation (CEYPETCO), one of the major semi government institutions which is in deep financial trouble had among other financial misdeeds misappropriated funds, made false tax declarations, and excessive payments to lawyers and advertisers.

In his 2009 report, which is being analysed by COPE headed by Senior Minister D. E. W. Gunasekera, the Auditor General pointed out that the CEYPETCO has failed to produce the title deeds for the Sapugaskanda mini terminal land valued at Rs.67 million. The existence and recoverability of the investment aggregating to Rs.55.5 million could not be determined due to the lack of evidence. “Twenty five acres of land valued at Rs.259 million at Muturajawela had been shown as an asset in the ledger. However there are no title deeds or documents to establish land ownership by CEYPETCO.

This is a highly suspicious transaction,” the report said. No evidence had been made available regarding the assets prior to December 31, 2002, reflected under property, plant and equipment. As result, the ownership, existence and completeness of such assets could not be determined in audit. Sufficient evidence was not made available to determine the recoverability of the Exercise Duty amounting to Rs.714 million from the General Treasury. Services of private lawyers had been obtained at a higher rate without obtaining prior approval of the Auditor General. The amount paid to lawyers during the year amounted to Rs.5 million.

The corporation had not included certain taxes which are not recoverable from tax authorities in determining the cost of purchase. Further, it was observed that the advertising cost of Rs.2.9 million had been included in the manufacturing cost and this has violated the provisions of SLAS inventories, the Auditor General said.

He said the corporation had paid PAYE tax from its own funds on behalf of the corporation employees contrary to the circular instructions. PAYE tax so paid from 2000 – 2009 amounted to a staggering Rs.777 million. Surprisingly and mysteriously the CEYPETCO has paid tax on PAYE tax. Further PAYE tax had not been paid in 2008 and 2009 which amounts to Rs.147 million and 148 million respectively. Officers who were not entitled to assign motor vehicles had been assigned with motor vehicles on the approval of the Board of Directors or the Chairman.

As such eight officers had been paid a sum of Rs.1.8 million as fuel and travelling allowance in 2009. A parliamentary source said considering the enormity of the misappropriation and mishandling of the CEYPETCO funds, the COPE has decided to go into a detailed investigation and called officials with all relevant documents to appear before COPE at the next hearing.

The COPE had been highly critical of the present CEYPETCO management and had instructed to recruit a CEO, CFO and a Financial Controller in addition to the establishment of a Treasury Management Unit to monitor the proper management of finance, the source added. Ironically, here is a state institution with receivable debts of Rs.84 billion and with estimated losses of Rs.14 million for this year and still without responsible officials to control the financial activities, the source said. (Sandun A. Jayasekera)
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  Comments - 45

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  • Jayantha de Alwis Tuesday, 06 September 2011 12:05 AM

    Despite the appearance in infrastructure development, if the government cannot eliminate or at least minimize corruption, we will go bankrupt and anarchy will be prevailed in the country.

    Subash W Tuesday, 06 September 2011 12:16 AM

    Yes you are correct freehit. Responsible to parliament not to President.

    Godaya Tuesday, 06 September 2011 12:25 AM

    CORRUPTION AND INEFFICIENCY IS RAMPANT, WHO CARES?

    Imran Hussein Tuesday, 06 September 2011 11:53 AM

    Who is behind all these and who is running CPC.This is the government.
    Similar to MRs 'rubbish' advise at the Galleface.

    Dinesh Tuesday, 06 September 2011 01:10 AM

    Identify these basic acccounting faults.

    backstreet boys Tuesday, 06 September 2011 02:14 AM

    This is the state of economical developments some people boast so much of......wonder what will be revealed if all state organizations are Audited this way

    Calistus Jayatilleke Tuesday, 06 September 2011 02:21 AM

    When the very root of the tree is bad, there is no point in trimming the branches.

    Nihal Tuesday, 06 September 2011 02:44 AM

    HUNDRED TIMES WORST THAN THIS IN THE CPSTL (KOLONNAWA) MANAGEMENT. PL BRING THIS ALSO TO THE COPE

    sarath Tuesday, 06 September 2011 02:57 AM

    The biggest menace for country's development is mass scale corruption. so pathetic............?

    upulkarupul Tuesday, 06 September 2011 03:25 AM

    None of these findings will stand as a restraint to exist of
    petroleum corporation

    jack Tuesday, 06 September 2011 03:31 AM

    Audit findings come out to public notice very late.
    Government should expedite audit of all public enterprises givng a dead line for audit,on or before the end of six months from the date of financial year.....

    jjk Tuesday, 06 September 2011 03:35 AM

    the country is not only free from terorism but also big corruption

    Gemiya Tuesday, 06 September 2011 03:50 AM

    This should be a false report.
    Ceylon petrolium Corporation is building a large office complex (around 10 storeys) in Dematagoda.
    If they are bankcrupt, how will they build such a large office complex there?

    Mad Hatter Tuesday, 06 September 2011 04:08 AM

    Very true. The government better be concerned about all this spending & corruption. It is costing the whole country funds other wise we are going to have to keep taking more loans and go bankrupt.

    Mosh Tuesday, 06 September 2011 02:19 PM

    Seems like Harry is playing out a lot!

    Dias Tuesday, 06 September 2011 04:28 AM

    Why the goverment is not give any permits to the sri lankans who work in the UAE to bring a car with out duty they should allow us to bring who has a driving licence in UAE and worked for more than 10 years.

    Sammy Tuesday, 06 September 2011 05:08 AM

    No wonder the account books have been showing big red balances, all these years. The cost of this is passed onto the consumer.

    Damien Perea Tuesday, 06 September 2011 05:23 AM

    ",” the report said. No evidence had been made available regarding the assets prior to December 31, 2002, reflected under property, plant and equipment."

    Was this highlighted in any Auditor General's report prior to 2009? If not, even the Auditor General/s have not done their job properly.

    Damien Perea Tuesday, 06 September 2011 05:17 AM

    If this is what happened before 2009, wait for the AG's Report after the new Chairman took over.

    Leslie Tuesday, 06 September 2011 05:22 AM

    The COPE investigation would be like going to the Toilet. They are sitting now, there will be deliberations, to be followed by lots of noise and finally the matter will be dropped.

    In the end the public will be burdened with more taxes, and increase in fuel prices. we will have to grin and bear.

    BBC Tuesday, 06 September 2011 05:32 AM

    Soon the Data Base Will Be Missing like in the Cricket Board end nothing happens.

    Talk, Reports and Press Briefing Only and Only nothing else

    See what has happening to former French President that should happened to the Official of the Petroleum and the Then Ministers

    Clinton Tuesday, 06 September 2011 05:26 AM

    Who cares? It is nobody's money,so nobody feels.The govt takes loans from every possible source.but the officials know very well that they don't have to pay it back personally.Though the cost of living goes high it doesn't matter.The rich can afford it.Even the poor masses don't protest because nobody listens to them.Anyway, they have to buy their necessities regardless of the price.No alternative.They enjoy and we suffer until death.

    Punchi Putha Tuesday, 06 September 2011 03:21 PM

    This is only a tip of the iceberg, if you start proper investigations, it will go right to the top.

    Ranjit Silva Tuesday, 06 September 2011 07:07 AM

    Has the Minister got any self respect. Every time some thing happens he tries to pass the buck. Ultimate responsibility is his or are we to conclude he is part and parcel of this.

    Nada Tuesday, 06 September 2011 07:19 AM

    shocking...

    Gayan Samarasekara Tuesday, 06 September 2011 08:27 AM

    Can't we at least distribute the imported oil, without corruption? How, if we had oil?

    V. Puran Appu Monday, 05 September 2011 03:49 PM

    Time to privatize petroleum business.

    munidasa Tuesday, 06 September 2011 09:05 AM

    Is the country we are living. we should be shamed ourselves. There is no need of narrating Buddha's teachings or other religious leaders saying when there things going on like this. What so called politicians doing or government with educated persons doing when such corruptions are taking place. I don't those politicains need to worship any religion because they cannot survive to have a good birth next time. As LOrd Buddhas taught us just worshipping no use, only following the principles with true heart is the only thing to go to Heaven or Nibbana.

    citizen Tuesday, 06 September 2011 09:20 AM

    manupulating books of accounts is a CRIMINAL
    OFFENCE. As far as I know CPC dealing are stricktly on cash or cash equivelent. How then so much of billions
    in A/C Receivable. No Interim Audits carried out? Looks to me like 'Smart One Man Show'

    anura Tuesday, 06 September 2011 09:24 AM

    the common man is taxed left and right with tax on tax on tax. we pay PAYE on earnings and further pay taxes on what we spend medicine, education, food, transport etc anything what we do to the GOSL. actually we pay more than Rs. 60 from Rs. 100 we earn. see what GOSL institutions are doing. IRD is sleeping over this tring to recover even Rs. 500 tax from poor private sector work force. Pathetic.

    freehit Monday, 05 September 2011 04:19 PM

    To rid the public service of rampant corruption, make the Auditor's Department independent of any Ministry (if it is not already) with sweeping powers, answerable only to the Parliament

    Dinesh Tuesday, 06 September 2011 09:30 AM

    Mr Dias is trying to take advantage form the cricis...typical Srilankan

    Dushar Dayarathna Monday, 05 September 2011 04:22 PM

    Only reports but no punishment.

    Kan Tuesday, 06 September 2011 09:37 AM

    A CEYPETCO- like no other corporation.

    Mck Monday, 05 September 2011 04:32 PM

    CEYPETCO Collapsed ? ? ? ? ?

    SAW Tuesday, 06 September 2011 09:42 AM

    A great opportunity for the government to do fishing in the troubled water. Now they can appoint a CEO of their choice and he is gonna feed the Minister of Petroleum Industries

    Nihal Amarasekera Tuesday, 06 September 2011 10:19 AM

    Shocking! culprits, are you shivering? No No

    Peacock1965 Monday, 05 September 2011 05:48 PM

    CEYPETCO, that should be the biggest money spinner in the country is the biggest 'Black Hole' sucking the entire nation... under all administration, including the current one..

    jaymiss Monday, 05 September 2011 06:07 PM

    Present gang may get promotions!.........

    Rosh Monday, 05 September 2011 06:10 PM

    Set fire everything there, throw the minister and officials too. Then build a new SLPETCO

    citizen Monday, 05 September 2011 06:30 PM

    One of the few giant monopolies in
    Sri Lanka CEYPETCO presenting false
    tax declarations is a CRIMINAL OFFENCE.
    Bring hrh

    Concerned Monday, 05 September 2011 06:55 PM

    Cope has been highly critical? On what? What's the use? Who will be found fault? We are awaiting the next fuel hike to accept it as real deshapremis!!

    Lankan man Monday, 05 September 2011 09:13 PM

    Only thing will happen Auditor General get punished for finding and publishing this information.

    Rohan Monday, 05 September 2011 09:44 PM

    CEYPETCO can't make money then why we have a minister to take care of the corp.? Business is not for the government only the crooks will get benifitted. Long live mahinda chinthanaya.

    Nam Monday, 05 September 2011 11:14 PM

    Malpractices, Misappropriation and corruption were found common in Srilanka, So what happened in the past? no action was taken against any one who found guilty of mishandling ministerial funds because they are ruling party members. This is not a big issue and let it go unnoticed.


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