Bandula mudalali Haal walin ayeth Koti gaanak gahala.

[AtulaSiriwardane]

As a first step they were able to persuade the cabinet to extend the duty waiver on rice imports initially granted only for November and December 2009 to March 21, 2010.
Such a lengthy duty waiver for rice imports is extraordinary as Sri Lanka’s own harvest season begins in mid January which mean that rice imports are not necessary after the middle of the month.
This year continued rice imports are particularly unnecessary as peace and the inclusion of northern — particularly the Mannar rice bowl in the annual harvest guarantees a bumper local crop.
Therefore the extended duty waiver certainly wasn’t extended on account of an impending shortage of rice or to provide rice to consumers at reasonable prices. As will soon become clear the duty waiver was extended for one reason alone; to enrich Bandula Gunawardena.
Step two
Taking advantage of this extended duty waiver our partners in crime placed orders for the import of 40,000 tonnes of rice through the STC. Extraordinarily all of this rice was to be delivered between January and March – the height of Sri Lanka’s own harvest season when rice imports are completely unnecessary. Even more extraordinary however was the price being paid for this rice.
While the market price for RRI 6 rice was $360 per tonne the State Trading Corporation placed orders for the import of the same grade of rice at $420, $435 and $520 a tonne.
10,000 tonnes of Myanmar rice was ordered at a cost of $420 a tonne while 20,000 tonnes of rice was ordered from Pakistan at $520 a tonne.
What was going on?
The answer is very simple. Pradeep Gunawardena and Bandula Gunawardena as the men driving the deals were collecting huge commissions for their overvalued orders.
The State Trading Corporation was ordering rice at $420 and $520 per tonne while their suppliers however were purchasing this rice at only 360 dollars leaving sellers with 60 – 140 dollars of clear profit per tonne and of course this excess money was distributed between the Minister his accomplice and their trading partners.


http://www.thesundayleader.lk/2010/0...-stealing-air/

 

[AtulaSiriwardane]

Simple really
However, the overall scale of the fraud is quite staggering. On December 28 the STC opened an LC with a local company, Plywood House of Kegalle for the import of 10,000 tonnes of rice from Myanmar at $420 a tonne. The rice was to be delivered in mid January.
Keep in mind the market price for the same rice was $360 per tonne meaning that the rice had been ordered with a clear $60 premium for every tonne.
$60 into 10,000 tonnes is 600,000 dollars or Rs. 70 million. Therefore the STC – a State Corporation tasked with stabilizing the prices of essential goods, paid Rs. 70 million over the odds for the unnecessary import of rice during the harvest season.
The total value of the LC was a staggering Rs. 600 million.
But even this wasn’t enough
The two Gunawardena’s had decided that this was the big one. That this was the scam that would keep them in Monteros and luxury houses well into their retirement — and having signed the Myanmar deal they decided to take their scheme to another level.
In January they purchased 20,000 tonnes of rice from a Pakistani company — Younus Brothers of Karachi. This time however a $60 margin just wasn’t enough and STC ordered the rice at a staggering $520 per tonne.
An extraordinary 160 unnecessary dollars for every tonne. 20,000 tonnes in total and $320,000 dollars or Rs. 400 million of state funds wasted and commissions gained for the two Gunawardenas.
This second purchase represents a truly criminal escalation of the original scam. Having secured at $420 per tonne from Myanmar they went ahead with purchase of rice at $520 from Pakistan. How could they possibly justify the import of rice at an even higher price?
As a vague cover up exercise the LC’s for the purchase of the Pakistani rice claim that it was the more valuable IRRI grade 9 10% broken rice that was being imported. However the LC makes clear that no weight or quality certificate was asked for, and Sri Lankans do not consume large quantities of IRRI grade 9. Tellingly all these purchases were made without tenders being called.
This is no ordinary fraud as it involves a commodity that is a necessity for virtually the entire population of the country.
The commissions made at Rs.400 million and Rs.70 million are simply staggering but even more galling is the fact that the STC by importing thousands of tonnes of expensive rice will distort the price of rice in the local market pushing it upwards and harming millions of consumers.
Therefore Bandula and Pradeep Gunawardena were not only misappropriating state funds they were also knowingly hurting Sri Lankan consumers; doubly ironic as Bandula Gunawardena is of course the Minister of Consumer Affairs.
As a footnote they also signed a deal for the import of an additional 5000 tonnes of IRRI grade 6 rice from another Pakistani company, Al Bagari Trading for $435 a kilo or $75 per tonne over the market price. Earning an additional $375000 or Rs.40 million in commissions, and bringing the total profit from the scam to over Rs. 500 million.
Five hundred million rupees of state funds unnecessarily spent and inevitably pocketed by the Minister and his accomplices.