Commodities worth Rs. 150 million found dumped in Lanka Sathosa warehouse

Stocks ordered during previous government

by Suresh Perera

In a startling discovery, non-essential commodities worth more than Rs. 150 million were found gathering dust in a Lanka Sathosa warehouse in Colombo, with most of the stocks past their shelf life, senior officials said.

The store at Maligawatte was raided last week by the internal audit division on a directive by Lanka Sathosa Chairman, Kiran Atapattu, and huge stocks of slow-moving, non-essential goods such as cosmetics, hair tonics, carrot facial wash, body lotions, expensive imported soaps, perfumes, mosquito repellants, sanitary towels, bran crackers, costly confectionery products, mops, brooms, wicks and milk food from a multinational company, procured during the previous government, were found dumped there, they said.

This is a crime as millions of rupees in public funds had been squandered to purchase unrealistic quantities of goods not in demand at Lanka Sathosa outlets, they noted. "It all points to substantial kickbacks on these procurements".

The stocks had been dumped in the warehouse from time to time and the practice had been continuing for the past one and a half years, the officials explained. "It had been a case of deliberately procuring excess stocks of slow-moving commodities, transferring them to the store on the verge of expiry and purchasing fresh consignments".

Customers visit Lanka Sathosa outlets to purchase essential commodities and not for perfumes, body lotions, imported soaps and bran crackers, they pointed out. "Driven by commissions, certain officers had got their priorities mixed up".

The core objective of Lanka Sathosa is to provide relief to the poor by offering day-to-day essentials such as rice, sugar, sprats, big onions, potatoes and Maldive fish at specially reduced rates, they underscored.

Eight more container loads of a brand of slow-moving milk food had been ordered when there were sufficient stocks in outlets for two months. The Chairman has now cancelled this order and no more fresh procurements of non-essentials will be done until the issues are sorted out, the officials assured.

Preliminary inquiries have revealed that payments for the commodities had been settled within 30 days, which was unusual as private sector supermarkets demand 90 days on the basis that all unsold goods within that period should be taken back, they said.

But, at Lanka Sathosa unsold commodities had been moved to a nondescript "Return Goods Store’ at Maligawatte, a practice not prevalent in the industry, as suppliers had been dumping surplus quantities without accepting any returns, they asserted. "As a result, the warehouse was brimming with unsold goods, which had long expired".

"The Chairman has ordered the immediate close of this store".

It was also discovered that big stocks of packeted tea had been dispatched to Lanka Sathosa outlets in the upcountry plantations, where better quality produce is available at competitive prices. Naturally, most consignments were returned unsold as it was like taking coal to Newcastle, the officials narrated.

The Chairman has now directed that no fresh stocks will be procured from suppliers until they recall the unsold expired goods and offset payments in procuring fresh consignments, the officials noted.

In addition, the special investigations unit has been directed by the Chairman to probe these irregular procurements, with checks on stocks held by Lanka Sathosa outlets countrywide in collaboration with the internal audit division. Officers involved in making these purchases will also be taken to task, they warned.

Officials believe that this is just the tip of the iceberg as more irregularities on procurements made during the previous regime are bound to surface as investigations continue.

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