(UTV|COLOMBO) – The Auditor General had examined the expenses of the CWG Hambantota 2018 (Pvt.) Ltd from November 23, 2010 to May 31, 2013, its initial share capital, financial donations to it, its financial statements and legal matters in relation to its liquidation.
“The total amount of funds received from public institutions, donations from private sector and interest income from banks was Rs. 698.9 million. It was discovered that Rs 570.8 million had been received from the private institutions and 85 individuals, but formal receipts had not been issued to them. Out of that sum, Rs 120.4 million had been directly obtained in cash.
A significant number of institutions which had donated money to the company had been commercial banks and financial institutions regulated under the Central Bank and their major stakeholders.Raising funds from the institutions, which are regulated under them, using their official designations was an act contrary to the professional code of conduct by the former Central Bank Governor and the former Sports Minister,” the report examined.
The report noted that the shutting down of the company’s operations on December 23, 2014 was not in accordance with the Company Act, and that the Director Board was responsible for that fault. It added that SriLankan Airlines had incurred a loss of Rs 32 million from discounts and price concessions on tickets for air travel undertaken for the Commonwealth Games bid.
The 34-member Organizing Committee set up for the bid to host the Commonwealth Games (CWG2018) in Hambantota was co-chaired by then Sports Minister Mahindananda Aluthgamage and then Central Bank Governor Ajith Nivard Cabraal.
The CWG Hambantota 2018 was a company with 51 per cent shares to the Government and 49 per cent shares to state owned institutions. Rs 10 million had been granted from the Sports Development Fund to the company for initial expenses. The Sports Ministry had utilised Rs 100 million of the Treasury funds (by way of a supplementary estimate) to buy shares of the above company in January 2011. The Sri Lanka Export Development Board and Sri Lanka Telecom had bought the company’s shares worth of Rs 8 million and Rs 10 million respectively in the same year.
The Auditor General in its report observed that the company had been set up without a proper feasibility study and Cabinet approval. It also observed that the four Government institutions were not properly issued shares for the money invested in the company.The report pointed out that the Sri Lanka Export Development Board investing Rs 8 million in CWG Hambantota 2018 (Pvt.) Ltd was contrary to the objectives set out in its Act.
In addition, a UK based international consultancy firm known as ‘PMP Legacy’ had been paid Rs 331 million in 2011 and January 2012 to prepare and present the bids to the Commonwealth Games Federation on behalf of Sri Lanka. According to the audit report, the payments had exceeded the initial amount agreed with the consultancy firm.
The audit report stressed that the selection of this consultancy firm had been done prior to even receiving cabinet approval for the establishment of the company, and that the process had violated the Government Procurement Guidelines.
The report said CWG Hambantota (Pvt) Ltd had written receipts without mentioning the name of the payee for Rs. 55 million received on 17 occasions. (DN)
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