The Committee on Public Enterprises (COPE) has revealed that Lanka Sathosa incurred a loss of Rs. 15,157,031,018 due to irregular rice imports in 2014 and 2015, carried out in violation of established procurement procedures.
The disclosure came during a COPE session chaired by Dr. Nishantha Samaraweera, held on October 10 to review the Auditor General’s reports for 2021 and 2022 and the corporation’s current performance.
The committee noted that although the cost of the imported rice amounted to Rs. 27,011,980,142, revenue from its sale totalled only Rs. 11,854,949,124. The investigation found that insufficient study of domestic rice market conditions, paddy harvests, and storage facilities contributed to the financial loss.
The COPE also inquired whether a formal investigation had been conducted; officials confirmed that the Bribery Investigation Division had referred the matter to the Attorney General’s Department for filing charges.
In addition, the COPE highlighted that 18 building owners who failed to complete construction properly had yet to settle dues owed to the corporation.
While guidelines allow advances to be withheld for unconstructed land, as of December 31, 2020, Rs. 34,234,996 was paid without proper estimates under 29 agreements. Sathosa has filed legal action to recover Rs. 27,435,000.
The COPE also pointed out potential institutional accountability issues arising from frequent staff changes due to contract-based appointments. Officials said measures had been adopted to extend such appointments up to five years to ensure continuity.
The COPE has flagged payments made without Treasury approval for several appointments, underlining the need for proper formalisation of such practices. Attention was also drawn to problems with the company’s Enterprise Resource Planning (ERP) system, which, despite substantial investment and expansion, failed to meet all operational needs.
Following discussions, the COPE chairman emphasized that Sathosa must be turned into a fully accountable institution.
The COPE session was attended by MPs including retired Lieutenant Commander Prageeth Madhuranga, Sudath Balagalla, Chandima Hettiarachchi, Dr. S. Sri Bawanandaraja, Thilina Samarakoon, M.K.M. Aslam, and Nilanti Kottahachchi.
