Sri Lanka’s largest state-owned retail chain, Lanka Sathosa, is under fire after Parliament’s COPE Committee exposed a staggering Rs. 15.1 billion loss from rice importation deals that ignored procurement rules, raising fresh concerns over corruption, accountability and mismanagement.
The Committee on Public Enterprises (COPE), chaired by MP Dr. Nishantha Samaraweera, revealed that during 2014 and 2015 Sathosa imported rice stocks worth Rs. 27,011,980,142 but recovered only Rs. 11,854,949,124 from sales, causing a direct loss of Rs. 15,157,031,018. The committee noted that rice was brought in without a proper market study of local harvests, storage or demand, and in violation of procurement arrangements.
COPE members pressed officials on whether a formal investigation had been conducted. They were told that the Criminal Investigation Department has already handed over charges to the Attorney General’s Department for legal action.
The committee also uncovered other irregularities, including Rs. 34,234,996 paid in advance for building construction on 29 agreements without estimates. Cases have been filed to recover Rs. 27,435,000 from 18 building owners who failed to complete structures suitable for use.
Concerns were also raised about key officers being hired on short-term contracts, creating instability and weakening accountability. Officials assured that future appointments will be extended to five-year terms. Additionally, COPE flagged allowances issued for appointments without Treasury approval and demanded regularization.
Another major lapse identified was the company’s costly Enterprise Resource Planning (ERP) system, which despite huge investment failed to meet operational needs.
Chairman Samaraweera stressed that Sathosa must transform into a responsible institution and called on officers to show commitment to restore credibility. Several parliamentarians including Lt. Commander (Retd.) Prageeth Madhuranga, Sudath Balagalla, Chandima Hettiarachchi, Dr. S. Sri Bawanandaraja, Thilina Samarakoon, M.K.M. Aslam, and Attorney-at-Law Nilanthi Kottahachchi participated in the session.
