Another Sugar Scam from state-owned sugar companies

COLOMBO (News 1st); The Pelwatte and Sevanagala sugar companies were taken over by the state via the Underperforming Enterprises and Underutilized Assets Act.

At present, these two companies operate under the Lanka Sugar Company (Pvt) Ltd - a fully government owned company.

Following the COVID pandemic, the government decided to offer Brown Sugar, produced by the Pelwatte and Sevanagala sugar companies, to cooperative societies at a lower price than the wholesale price as a measure to provide relief to the low-income communities.

Accordingly, sugar stocks were sold to private buyers at competitive prices through the tender process and to cooperative societies at lower concessional prices.

However, allegations have been raised that this process had led to widespread corruption.

Registered buyers with Lanka Sugar Company (Pvt) Ltd said that a sugar racket is taking place by using the names of cooperative societies.

At the most recent tender process, a kilogram of Brown Sugar was sold at Rs. 340/- to private buyers, while cooperative societies were sold a kilogram of Brown Sugar at Rs. 300/-. 

Sunil Premawardena. a registered buyer with Lanka Sugar Company (Pvt) Ltd told News 1st that sugar stocks sold to the cooperatives at a lower price are sold again at a higher prices to external parties.

On the 7th of last March, a letter was forwarded to Lanka Sugar Company (Pvt) Ltd stating that a sum of 14.3 Million was deposited to procure 50,000 kg of sugar in the name of the Hasalaka Cooperative Society Limited.

It is mentioned in the letter that two lorries will be sent for that purpose on the 8th of March.

However, when News 1st contacted the Chairman of Hasalaka Cooperative Society Limited, he said that they never ordered such a consignment of sugar.

He also said that the Cooperative Society does not have the ability to sell a large stock of sugar.

It is reported that parties connected to this malpractice earned an undue profit of Rs. 2 Million or more, from this transaction alone.

Maj Gen. Sarada Samarakoon, the Chairman of Lanka Sugar Company (Pvt) Ltd told News 1st that sugar stocks are dispatched as per the letters sent by the respective ministry.

He said that it is not his responsibility to ascertain whether the sugar stocks reach the consumers through the proper channels.

However, the Executive Director of Lanka Sugar Company (Pvt) Ltd said that necessary measures will be taken with regard to the cooperative societies.