(Lanka-e-News- 13.Feb.2015, 11.55PM)
Perpetration for Corruption-For the purpose2011 Tender bid evaluations and making recommendations, a Technical Evaluation Committee (TEC) and a Cabinet Appointed Procurement Committee (CAPC), under the leadership of Dr. R.H.S.Samaratungawere appointed by the Department of Public Finance of the Ministry of Finance Planning. The team completed the process and prepared the draft Cabinet Memorandum. Mr. Piyadasa Kudabalage(MD/CEO) was not happy about this process and In November 2011, MD/CEO decided to stop the Cabinet approval process and awarded the tender by himself to create a precedent that, Litro doesn’t require to follow government procedures in future and MD/CEO has the total freedom to manage Litro as his own private company.( Note - Annual Value of the Negotiable component of the tender is Over 2.5 Billion Rupees whereas the Total Tender Value is over 16 Billion Rupees).In this instance MD/CEO is guilty to the act of violating CAPB process.
MEGA LPG Deal -Unilaterally signed a Contract to supply LPG for an extended period of Two (2) years for a volume of 320,000 Tons in the middle of the formal tendering process, without informing the Internal tender committee or the Management Team. During the tendering process, which was started in March 2013, all reputed regional suppliers showed a strong interest and LPG Trader SIETCO ( Shell LPG arm in Singapore) visited Litro Gas on the 30th April 2013 to demonstrate their commitment and had a joint meeting with the MD/CEO, Sales &Marketing Director(S&MD) and Operation Director(OD). During this discussion, MD/CEO asked the possibility of offering a Premium of less than 120 US$/Ton for a two year period and they responded positively, adding that, the premium can be much more competitive than the number he indicated for a two year term contract, however, as per the shell business guide lines, he is unable to discuss the exact numbers in the middle of a formal tendering process. This was confirmed by an email communication as well. However, to the dismay of honest employees, it was later revealed that MD/CEO, Financial Controller(FC)and the Procurement Manager(PM) had secretly signed a contract on the 06th May 2013 and as per this contract, the prices were inflated by 9 US$/ Ton to 135 $ during the first year and by 14 US$/Ton to 140 $ during the second year, at a time the market premiums were declining due to reduced Piracy activity and other supply demand factors, which was confirmed during the above meeting by one reputed regional LPG supplier namely SIETCO. In this instance MD/CEO, FC and PO are guilty of orchestrating and executing a corrupt deal making a loss of over 700 Million to the GOSL.
Purchasing Off Spec LPG Cargos- On the 01st June 2013, above corrupt contract came into effect after exchanging a massive amount of money as explained above. Thirteen (13) days after starting the contract, supplier sent a ship “Gas Husky”, carrying an Off Spec cargo. Upon establishing the inferior quality of product ( Through Independent surveyor and CPC refinery laboratory) the Terminal Manager(TM ) in consultation with the OD, refused to accept the ship. MD/CEO made every effort to unload the ship, but above officers maintained their integrity and didn’t accept the ship. MD/CEO accused those honest officers saying “Saboteurs” and under severe pressure from the supplier, he made a last ditch attempt by sending one of his corrupt staff PM to the Commercial Anchorage ( This is the first time in the history a company employee went to the commercial anchorage ), advising him to bring a good sample. In his little knowledge and confused mindset, he failed to understand the difficulty in changing the composition of LPG sample, which is drawn into a sample Bomb. Truth prevailed, that sample also failed the test. However, MD/CEO made the full payment to the unloaded cargo, without any deduction and advised operations staff to fill the substandard product directly into domestic Gas cylinders, giving a further punishment to poor consumers. In this instance MD/CEO, FC, PM are guilty of producing fraudulent payment documents, authorizing and making irregular payments, without making deduction for quality variations.
Purchasing Spot LPG Cargos at Fixed Price- After signing the above contract, the supplier (OTI) started experiencing technical issuesresulting quality issues as explained above, leading to product shortage in Litro. MD/CEO took initiative to find alternate suppliers, to cover the shortage to fulfill his obligations to protect the supplier and Corrupt deal. In doingso, he purchased a LPG shipment of 3,000 Tons (Sapphire 1) from a supplier named “Royal Gas” in June 2013 at a Premium of 135 US$. It is practically impossible to purchase a spot cargo on urgent basis, at the same price of a well negotiated longTerm contract price. As such, he made it clear to the whole world that, he had inflated the Term contract price, by being able to buy an urgent spot cargo at the same price. Not only that, by matching the Spot price to the inflated Term contract price, he made another corrupt act by inflating the spot price also. This instance prove beyond any doubt that MD/CEO, FC and PM are guilty for the offence (2) above, whereas MD/CEO, FC and PM are guilty of inflating the price of Spot Cargo to cover up the second offence , making further losses to the GOSL.
Purchasing a Distress LPG cargo at a higher price- The above Ship “Sapphire 1” , which was planned to arrive in June 2013, developed mechanical failures leading to unprecedented delays and product shortage at Litro. The ship had a final major failure in the vicinity of the CBM ( Litro discharge point), making it impossible to move the ship with the load. However, after much effort, they managed to bring the ship to the CBM. As the ship was carrying 6,000 tons, it was not in a possible her to continue her voyage withthe remaining load of 3,000 Tons, resulting a distress cargo and was compelled to unload at any cost. In this occasion MD/CEO demonstrated his never ending greed for money by agreeing to buy the remaining cargo not only at the same Premium of 135$, but at the following months (July) Saudi Contract Price (CP ) of 791.5$, which was 29 $ higherthan the June CP of 762.5 $.This higher CP payment alone made a loss of over 11 million US$. It is very clear, thecombined (inflated CP and premium) income made by MD/CEO from this distress cargo quantity of approximately 3,000 tons shall exceed 25 Million Rupees. In this instance MD/CEO, FC and PO are guilty of orchestrating and executing a corrupt deal making a loss of over 25 Million to the GOSL.
Accepting Unsolicited Offers for LPG Supply- MD/CEOcontinue to procure LPG shipmentsfrom “Royal Petrol” at a set premium of 135 $,on random basis by manipulating LPG ordering quantities against his corrupt Two year supply contract. Another such occasion is procuring a LPG cargo of 3,750 Tons from Royal Petrol by the carrier “Globe Tanya” at his fixed premium of 135$. A total payment of about 450 million was made and a minimum of 10 Million was robbed by this deal with the help of his loyal FC and PM.In this instance again, MD/CEO, FC and PO are guilty of orchestrating and executing a corrupt deal making a loss of over 10 Million to the GOSL.
Continuation of Purchasing Off Spec Cargo- Under obligation to the supplier, MD/CEO continue to procure off spec LPG cargo’s from the main supplier and to facilitate this process, his loyal Procurement Manager changed the Independent Surveying Party (who was doing an honest job), to produce results of his choice. However, most of the Bulk customers with sensitive operation controls, continue to complain about the product quality. But MD/CEO couldn’t take any action to penalize the supplier due to his obligations. In this instance MD/CEO and PM are guilty of conspiring to manipulate LPG test results in order to receive Off Spec cargos, leading to customer dissatisfaction and loss to the GOSL by making irregular payments, without making deduction for quality variations.
President’s Birth day Gift- InNovember 2013, MD/CEO showed his interest to bring a LPG ship to Hambantota port in line with the Former Presidents Birth day, ignoring the advice of senior management. As the freight rate was reducing drastically due to reduced piracy activity and market trends, procurement manager was advised to call EOI’s. But as usual, PM ignored all basic procurement guide lines with the blessings of MD/CEO and purchased about 1,600 Tons from his Black market friend ‘Royal Petrol”, making over 7 Million Rupees. Interestingly, on this occasion also, the premium paid was 135 $ and the value of purchase was over 225 Million, at a time SIETCO (Shell) submitted an offer to supply LPG at a premium of 100$. This is clear evidence of price fixing. How can the same supplier “Royal Petrol” supply a smaller parcel of 1,600 Tons to a faraway location at the same premium of 135$?Isn’t this enough to prove beyond any reasonable doubt that, the Market Premium is around 100$ , whereas he signed a Two year corrupt deal @ 135$ and 140 $. Isn’t this enough to send this MD/CEO, FC and PO to prison for corruption?The loss to Litro didn’t stop here. After holding this for months, MD/CEO ordered operations department to transport this LPG by truck to Kerawalapitiya wasting millions of rupees. In this instance also, MD/CEO, FC and PO are guilty of orchestrating and executing a corrupt deal making a loss of over 8 Million to the GOSL.
Procurement through Negotiations- During the year 2013 alone, MD/CEO procured LPG cylinders of around 600 Million without following a proper tendering process. PO and FC assist him in these corrupt deals, to the dismay of employees, Internal Audit department staff of his own choice endorse all these acts by producing laughable investigation reports. This Audit department is still unable to locate about 5 company vehicles including a luxury BMW 5 series which were disappeared immediately after the registration. In this instance also, MD/CEO, FC, PMand the staff of Internal Audit are guilty of orchestrating and executing a corrupt deal making a loss of few Million to the GOSL.
Non Payment of Custom Duties for un-declared Cargo- Companyhad an accumulated undeclared stock of over 1,000 M Tons of LPG at the end of 2012 and MD/CEO instructed finance department to manipulate accounts to cover this stock. As per the country law, he is bound to declare any excess stocks received to customs as a separate declaration to pay the applicable duty and other charges. In this instance MD/CEO, FC, PM are guilty of producing fraudulent Custom declarations and not making correct payments, authorizing and making irregular financial record and Internal Audit for not conducting proper Internal Audits.
Contempt to Judiciary – MD/CEO used his political connections to non-implementation of the Pricing Formula which was recommended by the Supreme Court and Implemented by the Consumer Affairs Authority in every Two (2) months. By not complying the courts order MD/CEO manage to earn a higher profit by exploiting the poor consumers.But MD/CEO managed to influence CAA to maintain the LPG domestic cylinder price made at a time of historically highest world market LPG Price. In this instance MD/CEO and FC are guilty of Contempt of Court.
Treasure Hunting – MD/CEO used company employees in Treasure Hunting and in One such occasion on the 15th January 2012 , Litro employee KithsiriPalansuriya, Company Vehicle (WPPD 2674) and his team was taken into the Police custody by the Sri Lanka Police, Wariyapola and was officially informed to the company. However MD/CEO managed to release his team by using his influence and Department of Archeology worked during the week end to produce a letter to courts stating the place they were found excavating is not a published archeological site.The formal inquiry was held on 02 April 2012 by an independent inquiring officer, a retired President of the Labour Tribunals, F.N. de Silva, Attorney at Law & Solicitor. The inquiry report of Mr. F.N. de Silva dated 13 April 2012 held Palansuriya guilty of all above charges leveled against him. Based on the above findingsand the recommendations of the disciplinary board MD/CEO reluctantly agreed to terminate this employee. MD/CEO was furious on this and made arrangements to absorb him to a Litro Subsidiary “Sino Lanka” and later Litro Human Resourses Director (HRD)reinstated him on the same position after negotiating a service extension to him after completing his 60th Year. In the first instance MD/CEO is guilty of using his official capacity for Treasure hunting, which itself is a criminal act. Secondary MD/CEO and HRD is guilty of abusing their official positions for personal gain by reinstating a terminated employee through an improper channel.
Foreign Travel- In the 2012 and 2013 MD/CEO orchestrated foreign trips to UK and USA to meet his Children and wife . All these visits were made on Business and First Class including super luxury hotel accommodation. In addition to this he made a habit of having a family tour to a country under the cover of participating to the “Annual World LPG Forum”. The cost of Five Start Full Board Suite accommodation and Business/First class travel cost of millions of rupees were passed to the company and HRD whole heartedly approved those payments in violating existing policies and in the absence of any board sanction in anticipation of a service extension. After the return of his family from UK and USA, his business requirements in those countries came to a sudden stop.In this instance MD/CEO is guilty of abusing company money and HRD is guilty of lack of intervention by keeping a blind eye for his personal gain.
Telephone Cost of Family- MD/CEO used Litro funds to settle his Wife’s IDD call charges amounting to millions during this period. HR Director, who takes leading role in deducting employee salary for 10 Rupee excess in Telephone Bill, kept silent and endorsed all these wrong doings in anticipation of his service extension. In this instance also MD/CEO is guilty of abusing company money and HRD is guilty of lack of intervention by keeping a blind eye for his personal gain.
Aston Martin Car KY 0077- It is believed that, MD/CEO imported an Aston Martin car through his Son, by proving erroneous information to the customs about the vehicle age, Usage after registration in UK etc and then arranged a Duty concession in obtaining clearing permit by abusing his political contacts. By doing so, he violated the country law as well as made a loss of Government Duty and Tax income to the tune of 20 Million. In this instance also, MD/CEO is guilty of orchestrating and executing a corrupt deal making a loss of over 20 Million to the GOSL.
Responsible Parenting- MD/CEO provided a fully furnished office room to his Son ( A university drop out) and provided security guards and a backup vehicle ( defender) on company cost. Considering the office rental cost at the Union Place, this Father and Son utilize an area over 2,000 Square Feet and 3 parking slots .MD and his Children, use company money for their lunch. This is being practiced almost every day, where as a company vehicle is shuttling many times between his home and Office. In stark contrast, MD and the HRD didn’t allow to provide a subsidized meal to the hard working factory staff and doesn’t approve a breakfast for sales staff who leave home before dawn. In this instance also MD/CEO is guilty of abusing company money and HRD is guilty of lack of intervention by keeping a blind eye for his personal gain.
Private Staff - MD/CEO employ over 3 personal body guards at Litro and another 4 at the Sri Lanka Insurance, 2 Drivers and 3 Security guards at his Home.This staff used to accompany him even to Weddings and in some occasions, were instructed to taste food before he consume. Some were asked to wear Black uniform similar to PSD and other were asked to wear a uniform similar to VIP security.In this instance also MD/CEO is guilty of abusing company money and HRD is guilty of lack of intervention by keeping a blind eye for his personal gain.
Living in Luxury- MD/CEO rented his own House, which was in Nugegoda area and requested the company to provide a House. It is believed that , he bought this house for 80 Million at No 8, Rodrigo Lane, Nawala . As usual, HR Director came to assist him by arranging the rental to this Mansion and security, adding a huge burden to the company. A rental was paid in advance to the tune of 6 Million. Employees find it difficult to understand, how Company spent 1.6 Million for painting and over Six hundred Thousand rupees to install a lightning arrestor to a rental property. It is clear that, HRDand FC are key members of this fraud.Again In this instance MD/CEO is guilty of abusing company money and HRD and FC are guilty of lack of intervention by keeping a blind eye for their personal gain.
Salary and Allowances- From the inception, MD/CEO received monthly payments exceeding Millions of rupees, without having any Board Resolution or Finance Ministry approval. Finally he produced a dubious document, as the Finance Ministry approval. These payments were made against the Company Act and Again HRD and FC kept mum on all these financial frauds.In this instance also MD/CEO is guilty of abusing company money and HRD and FC are guilty of lack of intervention by keeping a blind eye for their personal gain.
Abuse of Vehicles - Any given time MD/CEO uses more than 5 Vehicles for his private use and he continue to change his vehicle fleet. He has the habit of buying luxury vehicle on annual basis. Immediately prior to the Presidential election he had a fleet of 7 vehicles as listed below. 1) PE- 7206 Mitsubishi Full Option Double Cab 2)KS- 7742 BMW 5 series 3) KN – 4716 Toyota Land Cruiser Prado 4) KY – 5208 Land Rover Jeep 5) PV – 2565 Land Rover 6) KJ – 3866 Mitsubishi Montero 7) KV – 6427 Land Rover . ( First 5 vehicles are from Litro Gas and Last 2 Vehicles are from Sri Lanka Insurance) . These procurements were made outside the tendering process involving significant commission payments and HRD had willfully neglected the process resulting heavy losses to the Company while allowing unlimited usage of Fuel. In this instance also, MD/CEO, HRD, FC, PM are guilty of orchestrating and executing corrupt deals making a heavy loss of over 10 Million to the GOSLand the staff of Internal Auditfor not conducting proper Internal Audits.
Erroneous Transfer of 350 Million- MD/CEO and FC transferred 350 Million to the Inland revenue department on or around the election day, on the instructions of a senior politician. On this occasion, he threatened the staff of the Finance department, who refused to carry out this fraudulent transaction.In this instance MD/CEO& FC are Guilty of intimidating law abiding employees and executing an illegal financial transaction in violating financial regulations.
Maintaining an Elders home – Without making a genuine effort to find suitablereplacements, MD/CEO extend the services of some retired staff in exchange of supporting his corruption. *HRD - On behalf of this HRD, company absorbs a total cost of over 10 Million/ year,whereas he had not done any HR development work during his total tenure. During the last two years, he is operating a private consultancy firm and most of his private work is being done at the Litro office during office hrs, and to the utter dismay of his staff, he conduct closed door meetings of his private company, in his office room and in some cases the sessions last more than half day. * Health and Safety Manager (HSM) – An Employee retrenched by the UniLevers for under-performance and Shell recruited him as an interim substitute until they find a competent Manager. Litro extend the service of this Manager at an annual maintenance cost of over 5 Million, where as he has not done any HSE training and company lost it’s ranking during the 2014 National Safety Award. Should a company doing a business with LPG ( A high risk substance) continue to maintain a lethargic individual on public money? *Business DevelopmentManager– An elderly employee was recruited to this newly created, when he was over 60 yrs and this was done to bribe this man to cover up MD/CEO’s inappropriate relationship with his daughter. (Note- A company employee was formally warned and subsequently threatened for having an affair with this female employee) . It was later revealed that this elderly employee was discarded by the Sri Lanka Insurance on a policy decision and he found his retirement home at Litro. HRD supported this knowing there is no carder vacancy.In this instance MD/CEO &HRD are Guilty of willful negligence in their professional capacity by not recruiting suitable staff for vacancies and guilty of abusing company money and HRD is additionally guilty of lack of intervention by keeping a blind eye for his personal gain.
Foreign trips as Bribes- MD/CEO use Foreign trips as bribes to persuade employees to support his corrupt deals. Annual Global LPG forum is one such event and so far he has not sent a single operation or technical staff to these events. In the resent event, which was held in North America, MD/CEO nominated the 60 year old HSM, who was scheduled to be retired after 3 months. This was arranged in return to his support in approving some substandard LPG accessories and tanks. Again In this instance MD/CEO is guilty of bribery and abusing company money and HRD is guilty of lack of intervention by keeping a blind eye for his personal gain.
Great Wall of Litro- MD/CEO built a unique entrance wall at the Litro Terminal in Kerawalapitiya and the Piling Job was awarded without tendering to over 5 million. Given the excuse of pending Presidents visit he managed to silence staff members who questioned the process and the requirement of this creation.In this instance MD/CEO, FC and PO are guilty of orchestrating and executing a corrupt deal making a loss to the GOSL.
Soft Heart-MD/CEO amended the company benefit policy to reward a female employee and again the infamous HR Director became his savior. It is believed that, “Sino Lanka” has a rented apartment to provide accommodation to visiting foreign staff for the “Hyatt” hotel project for a large sum. Ownership of this apartment is a matter of interest. It is public knowledge that, this apartment is used to interview somehigh performing female staff, who received salary increments, Bonus and other perks beyond the company policy.In this instance MD/CEO and HRD are guilty of obtaining Sexual Gratification for Female employees and abusing their official capacity
Political Donations and Activities- MD/CEO made donations worth Millions of rupees to political functions to Mr. Danasiri Amaratunga and various other people. There was no ratification process and funds were managed according to his own whims. Immediately prior to the Presidential election, MD had donated 1,000 number of cylinders with accessories to Mr. Thilanga Sumathipala to distribute free for election propaganda. It is learnt that, some of the company vehicles were given to various politicians for election related work and it is reliably learnt that, some of these vehicles were used in illegal activities. One such example is providing KY 1243 vehicle given to Mr. H.H.Anura Chandrasiri, a lawyer worked at the Temple trees. This was procured from a known party, without following a proper tender process. In addition he was paid a monthly fuel allowance of about 200,000 Rupees.In this instance MD/CEO, FC and HRDare jointlyguilty of involving in politics and abuse of Company Money. In addition HRD is guilty of not discharging his duties by allowing external people to use Company assets, which come under his direct supervision.
Anti-competitive practices- MD/CEO openly instructed his distributors to collect competitor cylinders in numbers and were repainted in the Mabima filling facility. Most of the senior staff objected to this unethical practice, but he continued this practice and to conduct this practice in a large scale, a fully equipped repainting facility is being established at Mabima. This equipment procurement also was done in a very dubious manner through his loyal group of employees.
Hambantota Tank Farm-In order to satisfy political hierarchy, MD/CEO leased this facility for an exorbitant cost, without having any business plan. As a result, the company had to spend over 100 Million rupees by this time for necessary maintenance and modifications. Now Litro has its staff including security to provide a 24 Hr operation and safety support.
Sino Lanka Money Laundering Office – This corrupt MD/CEO has registered numerous companies as subsidiaries of Litro gas and used to provide employment to his cronies. Few examples are as follows. * An accountant who worked in the Sri Lanka Insurance as an Internal Auditor to protect all SLI corruptions was made the GM of Sino Lanka, Which is the managing company for Spa’s and Hotels.* Another person was made a consultant amidst his ongoing legal issues related to infamous Ceylinco financial frauds. MD/CEO would have considered a residential training program he received in the University of Welikada after completing Ceylinco Diploma. * Under this company, MD/CEO inflated the cost of Southern Expressway Rest Area Construction cost from 350 million to 800+ Million, without adhering to any contract management procedure. * All the procurements for Hotel Projects were done without tendering , through suppliers of MD/CEO choice.
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This HRD - Sanath Ediriweera is only a Human Remains Director. He has done nothing for the staff for last 12 years, but only manipulated policies and procedures to the benefit of him and his family members. He is an utter disgrace to the whole Human Resource discipline.
-- by Lanka boy on 2015-02-19
