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Dulles freezes Rs 6 billion SLTB fund pending audit
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Committee responsible for Private Provident Fund increased standard 12 % payment to 32 %
by Shamindra Ferdinando

Transport Minister Dulles Alahapperuma said that timely detection of a massive-scam in the Private Provident Fund (PPF) of the SLTB prevented a financial catastrophe.

"Had I turned a blind eye to what he called the mega rip-off, the account would have been zero in few years," he said, emphasizing that the retiring workers would have to go empty handed. He placed the number of workers likely to be affected at 1,600.

In an interview with The Island, the National List MP, said that his colleague Lasantha Alagiyawanne, in charge of the road passenger transport portfolio felt that immediate action was needed to tackle the problem. According to him, the Committee in charge of the PPF had gradually increased the standard 12 per cent PPF payment to workers and by 2003 it had been raised to an unprecedented 32 per cent.

He said that initial inquiries revealed that the gradual increase of PPF payments had begun in 1997.

The Committee which included representatives of Sri Lanka Nidahas Sevaka Sangamaya, Jathika Sevaka Sangamaya and All Ceylon Transport Workers Union had resisted repeated attempts by relevant authorities, including the Auditor General, to scrutinize the accounts, the minister said.

The All Ceylon Transport Workers Union recently challenged Alahapperuma’s assertion that there had an eight billion rupee fraud in the PPF of the SLTB. Sepala Liyanage, the General Secretary of the union affiliated to the JVP said that this could be an attempt to transfer six billion rupees in the PPF to the Central Bank. "The whole thing could be a ruse to facilitate the transfer of the funds," he said.

The minister said that his efforts to revive the SLTB had received the support of all unions irrespective of their political affiliations. The All Ceylon Transport Workers Union, too, has extended its support, he said. "There is absolutely no doubt about that," he said, but no one could be allowed to manipulate the SLTB fund. A senior SLTB official who retired recently received a staggering Rs 6.4 million, he said. This was the direct result of irregular payments made on the basis of an unprecedented 32 per cent contribution by the institution, he said.

He said that despite Langama having an annual revenue of Rs 12 billion, successive governments had failed to appoint a qualified chief accountant. He expressed the belief that the absence of a qualified professional had helped a set of crooked officials and trade union representatives.

He said that the recent appointment of a qualified accountant as Deputy General Manager (Finance) would help the restoration of financial law and order. He would conduct a comprehensive investigation of the payments, he said. Until the finalization of the report which would be ready in about three weeks, the minister has blocked payments. "Payments wouldn’t be allowed until the finalization of the inquiry," he said.

The minister emphasized that he wouldn’t want to fight with any union. That wasn’t my style, he said. "But as the minister in charge of the transport portfolio, I wouldn’t give in to trade union pressure."

Although Alahapperuma claimed that the fraud was second only to the mega VAT scam, if his assertion that there had been an eight billion rupee fraud in the SLTB, it would definitely be the biggest ever robbery in a government institution.

According to the Public Accounts Committee (PAC) and the Auditor General, the Inland Revenue Department had fraudulently refunded VAT to the tune of Rs. 3.6 billion during the period 15.11.2002 to 15.08.2004. A subsequent fraudulent VAT refund of Rs 315 million had raised the total misappropriated amount to Rs 3.9 billion.

The minister dismissed Liyanage’s claim that he wanted to shift the PPF funds to the Central Bank. Fielding questions, he claimed that officials who had been implicated in the fraud would make false allegations to protect their interests.

For want of an effective system by the EPF (Employees Provident Fund) which was responsible for supervision of PPFs, had allowed SLTB officials to misappropriate funds, well informed sources said. Although the SLTB had brazenly ignored repeated calls to forward annual records to the EPF, it had failed to take it up with relevant authorities, the sources said.

The minister requested D.S. Edirisinghe, the officer in overall charge of the EPF, to scrutinise SLTB accounts.

 

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