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 Post subject: Corruption and fraud charges against Milinda Moragoda
 Post Posted: Wed Dec 20, 2006 2:35 am 
Grave financial corruption and fraud charges against Milinda Moragoda
Milinda to join Govt. to escape trouble?

The amount defaulted was Rs. 4,700 million as at 31-12-2004 and its value as of today has grown to Rs. 6,000 million. Moragoda as Minister of Economic reforms has caused a loss of Rs. 1,700 million in privatising Lanka Marine Services and a sum of over Rs. 3,000 million only by non-compliance with the 4th term of the contract, in the privatization of the Sri Lanka Insurance Corporation, to the Government. Allegations have also come up that corruption and frauds amounting to Rs. 600 million by the import of wheat flour under the Indian line of credit, Rs. 1,500 million by the import of cars and Rs. 650 million by the Online Lottery that occurred when Moragoda was functioning as a Minister.

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@ Sunday Standard
Sunday December 17, 2006 Vol: 01 Issue: 23
By: Ranjith Nimalsiri


UNP MP Milinda Moragoda is bracing himself to join the Government as a strategy to allegedly escape from several grave financial corruption and fraud charges directed at him by the Parliamentary Committee on Public Enterprises.

These charges have been levelled in connection with avoiding repayment of a sum of Rs. 1750 million obtained by Mercantile Credit Ltd in 1991 by providing false information as a director of that company and two privatisations and a few other transactions in his capacity as the Minister of Economic Reform and Science and Technology of the 2001-04 UNP Government.

The Parliamentary Committee on Public Enterprises (COPE) had conducted three inquiries before with regard to avoiding re-payment of the loan obtained by Mercantile Credit Ltd, and utilising that loan in 13 companies operating under Mercantile Credit Ltd of which he is a Director instead of paying the depositors which was the objective of obtaining that loan. But on every such occasion those inquiries never reached the final stage owing to Moragoda's intimate connections with the existing government and the head of state. However the report of the Parliamentary Committee on Public Enterprises held for the fourth time is due to be submitted to Parliament on January 5th 2007.

The amount defaulted in this manner was Rs. 4,700 million as at 31-12-2004 and its value as of today has grown to Rs. 6,000 million.

Even when the loan Mercantile Credit Ltd obtained from the Central Bank of Sri Lanka providing false information has been misappropriated, Moragoda a director of the company managed to obtain the Central Bank's permission to launch two new banks of which he is a director too has come under inquiry by the Parliamentary Committee because it has been done in contravention of the Banking Act.

The number of cases filed in respect of Mercantile Credit Ltd not repaying deposits is 3,465. Although the Central Bank did not take any action against Moragoda and the board of directors in connection with this financial fraud action has been filed against directors of finance companies such as HPT and Hideki and punishment secured, even when they failed to repay monies having obtained lesser amounts as loans.

The Mercantile Credit has also obtained a loan of Rs. 120 million from the Bank of Ceylon also and defaulted re-payment. In addition it is said that Moragoda as Minister of Economic reforms has caused a loss of Rs. 1,700 million in privatising Lanka Marine Services and a sum of over Rs. 3,000 million only by non-compliance with the 4th term of the contract, in the privatization of the Sri Lanka Insurance Corporation, to the Government. Grave charges of irregularity and corruption have ben levelled against this privatisation process.

Allegations have also come up that corruption and frauds amounting to Rs. 600 million by the import of wheat flour under the Indian line of credit, Rs. 1,500 million by the import of cars and Rs. 650 million by the Online Lottery that occurred when Moragoda was functioning as a Minister. Another allegation against him is awarding of the contract to remove land mines in the North and East to the value of Rs. 1,000 million obtained from the Norwegian Government to his private voluntary organisation.

The name of Finance Ministry Secretary Dr. P. B. Jayasundera has also been mentioned in connection of most of these transactions and irregularities.


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