Rs.500 Mn spent from EPF to purchase SriLankan shares - Witness

Rs.500 million has been spent from the Employees’ Provident Fund (EPF) to purchase SriLankan Airlines’ shares which belonged to the Emirates Company in 2010 violating rules and regulations, EPF Superintendent, Nalini Malkanthi Bandara told the Presidential Commission of Inquiry (PCoI) on Sri Lankan Airlines, yesterday (28).

It was also revealed that this alleged misappropriation of EPF funds had been taking place during the tenure of former Central Bank of Sri Lanka (CBSL) Governor Ajith Nivard Cabraal. Not even the Cabinet of Ministers, but only the Monetary Board of the CBSL is permitted to take decisions on investing money of the EPF, the witness said.

According to the witness, neither the Cabinet of Ministers nor the General Treasury had given their approval to invest EPF’s money to purchase the SLA shares. A Cabinet Paper presented by the former President and then Minister of Finance Mahinda Rajapaksha on May 4, 2010 says that the SLA shares of about 44% owned by the Emirates should be purchased by the BoC and Sri Lanka Insurance Corporation but the name of the EPF is not appeared there.

But, a letter dated July 06, 2010 from the Assistant General Manager of the BoC, B.A. Lionel had informed the Funds Management Committee of the CBSL to credit Rs.500 Million to the current account of the Corporative Branch of the BoC to purchase these shares. This was how this deal took place and accordingly, about 1.8 Million shares have been given to the EPF, the witness said.

[‘EPF total funds top Rs. 2 trillion’]

The total funds belonging to the Employees Provident Fund (EPF) top Rs.2 trillion and 91.68% of it has been invested in government securities, Superintendent of the fund Nalini Malkanthi Bandara said yesterday.

she further said that 3.37 per cent of the fund has been invested in listed companies, 0.17 per cent in non listed companies and 2.44 per cent in the financial market .

She was giving evidence before the Presidential Commission investigating into alleged corruption that have taken place at SriLankan Airlines, SriLankan Catering and Mihin LankaBandara added that the EPF receives Rs.2.6 billion as monthly contribution from 16.7 million members a month.



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