The EPF’s bad investments that return no dividends

The EPF’s bad investments that return no dividends

Written by Staff Writer

01 Oct, 2018 | 8:44 pm

Colombo (News1st): The Employees Provident Fund (EPF), a boon for the working people of Sri Lanka has sustained major losses due to investments in various businesses in the recent past.

The Presidential Commission of Inquiry into large-scale corruption at Sri Lankan Airlines brought to light shocking revelations on misdealings with the resources of the EPF. A senior official at the EPF testified before the Presidential Commission of Inquiry today (October 01). She revealed that the EPF had invested a sum of Rs. 495 million in Cargills Bank which was established recently. It was also revealed that the EPF is yet to receive any dividends as a result of this investment.

There have also been no returns from an injection of Rs. 5 billion into Canwill Holdings. Four persons including the former President’s Chief of Staff Gamini Senarath and Piyadasa Kudabalage served as directors of Canwill Holdings, they are currently facing legal action over irregularities in the Hyatt hotel project. Investigations have revealed that the money illegally invested from the EPF into Canwill holdings had then been defrauded by funneling it into a different company.

It was also revealed today that EPF funds had been invested into two more hotel projects, with the EPF yet to receive any dividends from these investments.

The testimony by  EPF official revealed that a sum of Rs. 500 million belonging to the EPF had been invested in Sri Lankan airlines in the year 2010, when Emirates withdrew from managing the airline. The EPF official noted that this investment was made in violation of procedure as existing regulations dictate that EPF funds can only be invested in listed companies on the Colombo Stock Exchange. While approval must be sought from the Central Bank Governor for any investment outside these regulations, it was revealed that such approval had not been granted. The Governor of the Central Bank at the time was Ajith Nivard Cabraal.

As per the Central Bank, the notational value of the Rs. 500 Million investment in Sri Lankan Airlines is now a mere Rs. 100.

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