Mahapola Trust fund : another depature from due process

COLOMBO (News 1st) - On Wednesday (Aug 29th), it was revealed that the Cabinet of ministers had decided to liquidate two companies that managed the investment of funds from the Mahapola scholarship fund due to the "negative impact it had caused." The cabinet has now decided to invest all the funds belonging to the Mahapola Higher Education Scholarship Trust Fund in state banks and Central bank bonds. The Mahapola trust fund was set up in 1981 by then education minister Lalith Athulathmudali to provide assistance for University students to carry out their educational activities. The fund is chaired by the Chief justice of the country and a group of trustees has also been appointed to look after the fund. If there is any form of misappropriation or irregularity the Chief justice, as the chair of the fund, and the trustees of the fund could be held directly responsible. It was revealed recently that although an investment committee was set up to advice the company which managed the fund, on what investments to make, the said committee had not done anything. According to the scientific manner in which ministries and duties were distributed under the current administration the responsibility of the Mahapola fund well with the Ministry of Trade and the Ministry of Development Strategies and International trade before coming under the Ministry of Higher education during the most recent cabinet reshuffle. The Daily FT reported yesterday that losses to the tune of Rs. 2.254 billion due to investment choices by the two fund management companies set up to handle Mahapola Fund have been settled by the Mahapola Fund. This revelation had been made to the cabinet by Min. Wijeyadasa Rajapaksha. The Daily FT also reported that the minister had revealed that the investment committee, which consists of trustees, had not met in 15 years to discuss the investments made by the fund. ANOTHER CONFLICT OF INTEREST By 2014 an individual by the name of Asanga Seneviratne was occupying the position of Chairman of the National Wealth Corporation (Nat Wealth), one of the companies that was created to manage the Mahapola Trust Fund. At the same time, he was on the board of directors of another company, Nation Lanka Finance PLC. A closer look at the shareholders' list of Nation Lanka Finance PLC (at the time) reveals that Nat Wealth is the 8th largest shareholder of the company. However soon after the change in administration in 2015 Nat Wealth mysteriously sold its shares in National Lanka Finance. The matter becomes even more suspicious because, by 2016, Asanga Seneviratne also disappears from the board of directors It wouldn't be too difficult to think that this could be a case of pumping and dumping that was going on in the CSE at that time. In the interest of transparency, the best course of action the Government could take if it is serious about cracking down on fraud is to conduct a forensic audit of the 2 companies that were set up to manage the trust fund prior to them being liquidated. We also believe that the Auditor General should take a proactive decision to exercise his powers, which he received through the 19th amendment, to ensure that these companies are investigated. The Auditor General should also take quick steps to take into custody all relevant documentation on these companies because there have been numerous instances in the not too distant past where crucial documents relating to fraud and corruption have been misplaced, been destroyed or archived.