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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2673

Finance Ministry to report the malpractices at Hyatt Hotel project to FCID

Colombo, 11 July, (Asiantribune.com):

On the instruction of the minister of Finance Mr Ravi Karunanayake, the finance ministry has taken the necessary initiatives to make a formal complaint to the Police Financial Crime Investigation Division (FCID) on the large scale misappropriation of funds and malpractices said to have taken place in the construction of the Hyatt Hotel projects in Colpetty and Hambantota during the last regime.

The Hyatt hotel project is owned by M/S Canwill Holdings Ltd which is a fully government owned public enterprise. 46 percent of its shares are held by Sri Lanka Insurance while the rest is equally shared by the EPF, and the Litro Gas Company under the finance ministry each holding 27 percent of the shares.

Soon after the new government came into office, the new management of the Canwill Holdings conducted a forensic audit on the affairs of the company.

This out sourced forensic audit firm has uncovered mass fraud and malpractices inclusive of the doubling the initial cost of the construction to Rs 27 billion from Rs 13 billion. Canwill Holdings was previously managed by the former President's Chief of Staff Mr. Gamini Senarath who has also held several other high profile offices in several other public enterprises inclusive of Litro Gas which is a stake holder of the owning company of the Hyatt Hotel project.
According to Mr Shalila Moonasinghe, the present chairman of the Litro Gas Lanka Ltd who is also Director at the Canwill Holdings, a host of irregularities and mismanagements have been highlighted in the forensic audit which warrants further investigations by Police.

The forensic audit report points out that the company of which Mr Gamini Senarath was at the helm has had no regards to the laid down tender procedures and has engaged in surreptitious transactions blatantly violating all norms and regulations.

A payment of Rs 10 million has been made to a lawyer without any agreement, Rs 16 million losses were reported in steel purchases. Rs 80 million payment to a fitting supplier without the Board of Directors approval and entering into an international tender for US dollar 37 million the day before the January 08, Presidential election are among the host of irregularities unearthed by the forensic audit.

Hyatt Hotel project has two components with other being the construction of another hotel in Hambantota. It has been revealed that Rs 300 million has been spent from the Rs 5 billion earmarked for the Hambantota Hyatt project even without the foundation stone being laid for the project

Mr Shalila Moonasinghe, the Director of the Canwill Holdings said that on the instruction of the Minister Ravi karunanayake, the company would make the formal complain to the Police FCID next week with reported incidents of irregularities for further investigation by the Police.

- Asian Tribune -

The Hyatt hotel project
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