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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Two VIP mill owners ruling paddy fields in Polonnaruwa

Two VIP mill owners ruling paddy fields in Polonnaruwa

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Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

The parliamentary Committee on Public Enterprises (COPE) has in its inquiries found that two politically influential mill owners in the Polonnaruwa district have defaulted on the repayment of loans amounting to Rs.300 million borrowed from a state bank, it is learnt.

The loans had been obtained to purchase paddy from farmers in the area. The Bank had eventually written off this amount as bad debt.

These two mill owners who enjoy a major stake in the country’s paddy marketing industry have been used to obtain loans from the banking sector during harvesting times. This had been happening from the time Chandrika Banbaranaike Kumaratunga was President.

United National Party (UNP) MP Ravi Karunanayake raised the issue in Parliament last week. He said COPE examined some documents sent by this state bank giving details about those who defaulted on their loan repayments with the backing of political higher ups.

“We summoned the bank officials and they told about these matters when we were checking on loan outstandings,” Mr. Karunanayake who is a COPE member said.

According to official statements tabled in Parliament, the non-performing loans of the Bank of Ceylon and the bad debt of the People’s Bank had increased to Rs.170 billion by March this year while the total value of non-performing loans is as high at Lankaputhra Bank is as high as Rs.1.5 billion.

At present the Treasury has a method in place for the approval of loans for private traders and mill owners to purchase paddy from farmers. Meanwhile the Paddy Marketing Board is known to buy paddy at a guaranteed price.

Former Polonnaruwa District Janatha Vimukthi Peramuna (JVP) MP S.K. Subasinghe said though there was a mechanism for the issue of loans, small mill owners are always at the receiving end.

“Leading mill owners enjoy a monopoly. Right at the beginning of harvesting, they obtain loans from state banks without any hassle. Then, they buy and hoard stocks. When small scale mill owners get loans after going through difficult formalities, there isn’t much paddy left to be procured from farmers. Leading mill owners also manipulate the prices by the use of devious methods,” he said. (Kelum Bandara)

http://www.dailymirror.lk/news/18647-two-vip-mill-owners-ruling-paddy-fields-in-polonnaruwa.html

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

These two politically backed mill owners are,

1. Nipuna Gamlath - Chairman, Nipuna Rice Mill and member of parliment ( Is he a minister. Since we have a jumbo cabinet, I don't remember the names)

2. Douglas Sirisena - Brother of Minister Maithripala Sirisena

They are the two wealthy businessmen controlling paddy price in Anuradhapura and Polonnaruwa.

They cannot pay the loan taken from public banks. However, they are investing in other ventures,

http://www.dailynews.lk/2012/04/11/bus04.asp

This is how public money is wasted.

manula


Vice President - Equity Analytics
Vice President - Equity Analytics

@Monster wrote:These two politically backed mill owners are,

1. Nipuna Gamlath - Chairman, Nipuna Rice Mill and member of parliment ( Is he a minister. Since we have a jumbo cabinet, I don't remember the names)

2. Douglas Sirisena - Brother of Minister Maithripala Sirisena

They are the two wealthy businessmen controlling paddy price in Anuradhapura and Polonnaruwa.

They cannot pay the loan taken from public banks. However, they are investing in other ventures,

http://www.dailynews.lk/2012/04/11/bus04.asp

This is how public money is wasted.

yes.see.. if we want to take a loan how many paper work/documents etc... so what about guranters... for them nothing

This is 300 million ...and what about this massive Rs 125 bilion debets going to be written off... (from Daily mirror). they are not publishing the name even.. what a relief for them...

A massive Rs.125 billion has been written off as bad debts by the two state banks during the past ten years, Parliament was informed yesterday. This was much higher than the government’s allocation for health, education and economic development sectors.

The government usually allocates amounts ranging from Rs.40 billion to Rs.75 billion for each of those sectors every year.

The Bank of Ceylon has written off Rs.116.5 billion while the People’s Bank has written off Rs.857 billion.

UNP MP Ravi Karunanayake tabled in Parliament two separate documents which had been sent to the parliamentary Committee on Public Enterprises (COPE) recently by officials of the two banks outlining their out standings and non-performing loans.

According to the letter send by the Bank of Ceylon Additional General Manager Rs.11.3 billion had been written off last year; Rs.12.6 billion in 2010; Rs.15.5 billion in 2009; Rs.13.8 billion in 2008; Rs.11.3 in 2007; Rs.13.6 billion in 2006; Rs.12.5 in 2005; Rs.12.3 billion in 2004; Rs.17.1 billion in 2003; Rs.19.9 billion in 2002 and Rs.21. 8 billion in 2001.

The People’s Bank had written off Rs.788 million in 2011; Rs.316 million in 2010; Rs.157 million in 2009 and Rs.787 million in 2008.

Mr. Karunanayake moving a private member’s motion asked the government to introduce a law to provide for the publishing of names of defaulters who had burrowed more than Rs.100 million each.

“In these instances, we are informed by the officials of these banks that politically influential people have defaulted payment of their loans in this manner. I know the government is always hunting people who have defaulted Rs.20,000 or Rs.30,000 borrowed for the agricultural activities. Yet, they keep silent on these influential people,” he said.

Mr. Karunanayake said at Lankaputhra Bank, the rate of non-performing loans was high as 50 per cent.

“The government spends only Rs.8.8 billion to give Samurdhi subsidies. Yet, they have written off loans worth Rs.11.4 given by the Bank of Ceylon to political henchmen,” he alleged.

Senior Minister D.E.W. Gunasekara said there were legal obligations that made it difficult to publish the names of defaulters.

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