LOCAL

Rakna Lanka – Avant-Garde agreements illegal: COPE

Tharushan Fernando

The Committee on Public Enterprises, or COPE, says that the agreements signed between Rakna Arakshaka Lanka Limited and Avant-Garde Security Services Private Limited, are illegal.

The COPE committee recommends that the Defence Secretary provide a report in this regard to them, after consulting with the Attorney General.

The investigative report compiled by COPE into nineteen state enterprises was released recently.

The investigation into Rakna Arakshaka Lanka has revealed a number of special details.

According to the COPE report, six project agreements signed and entered into by Rakna Arakshaka Lanka Limited and Avant-Garde Security Services Private Limited were not approved by the Treasury, the Ministry of Defence, or its Boards of Directors.

The COPE Report states that even though these six agreements had been combined to form a single agreement, and was signed again with Avant-Garde Security Services Private Limited on January 27, 2014, this too cannot be accepted as legal.

The Report reveals that while such an environment existed, on October 20, 2015, the current government decided to slash Rs.255 million of the monies owed by Avant-Garde Security Services Private Limited to Rakna Arakshaka Lanka Limited.

By 2014, the amount owed by Avant-Garde Security Services Private Limited to Rakna Arakshaka Lanka Limited was Rs.843 Million.

The report further states that the distribution of profits between Rakna Arakshaka Lanka Limited and Avant-Garde Security Services Private Limited was carried out based on unfair conditions.

Even though Rakna Arakshaka Lanka Limited was contracted to receive 12 percent of the total income in 2012, by 2014, that percentage had reduced to 7.5.

As a result, over 75 percent of the profits of the Joint Venture was absorbed by Avant-Garde Security Services Private Limited .

Categories