Expose`: Loss of Rs. 2 billion to the Peoples Bank due to mismanagement

COLOMBO (News 1st):- The management of People's Bank has admitted that a serious fraud had taken place during the digitizing process of the bank. Testifying before COPE Former Chairman of the People's Bank Hemasiri Fernando said, the relevant company in charge of the digitization process had been paid in excess of Rs. 2 billion. During the COPE proceedings, the Chairman of the COPE, Sunil Handunetti said that the digitization process has been granted to a company named Silver Lake at the cost of US$ 11 million. He further said that the issue that prevails here is that an excessive amount has been paid apart from the fee that was agreed upon and that the AG has added all the amounts. He continued to say that with all the additions that by the 26th of last month that the company named as Just in Time technologies has been paid an additional amount of Rs. 84 million. He says that the company named Silver Lake Spring has been paid and that the Silver Lake Digital Economy has been paid Rs. 135.638 million. Handunetti said that they have requested for vouchers, invoices and other information regarding these additional payments but that according to the Auditor General that they have only provided information regarding the Rs. 84 million and even for this amount that there is no invoice, apart from an invoice from the GIT. An official of the Peoples Bank states that the head of IT certified that this transaction is truthful and that based on the certification, the General Manager at the time has recommended that this should be paid. Former Chairman of the Peoples Bank, Hemasiri Fernando- "We had to act upon the recommendation and acceptance of one person who was the head of IT. There was no other senior official to challenge this recommendation. However, three years later, it became clear to me that we have paid in excess of more than 200%, compared to the price which was originally agreed. Initially it said, the cost was Rs 745 million, for the entire digitization process, however, 3 years later, we had paid more than Rs 2 billion. We had not known that because this entire project was being handled by one single person at the IT Department. When that person and the General Manager recommend it, we pay the amount. Sometimes, we do not go through it thoroughly because we do not understand. Another thing should be mentioned, I will accept that there have been several shortcomings on our part when considering contracts which have been handed over to Silver Lake, since 2004. Once we understood that we were falling in trouble when relying on one person's expertise, we decided to take action. However, now those activities are being carried out in a proper manner through the committee." Chairman of the COPE Sunil Handunnetti "There is another thing which should be asked. According to Section 94 of the Inland Revenue Act of 2006, based on the income and profits earned by a foreign company, 10% of it should be paid to the Government as royalty. Has the People's Bank paid that on behalf of Silver Lake?" To which the official from the Peoples Bank responded that according to his knowledge that this has not happened and that according to the information that was received by them that they are aware that it has been paid. A member of the COPE said that Rs. 187 million has been paid while Rs. 105 million has been paid as taxes on behalf of the Silver Lake Digital Economy. The official of the Peoples Bank stated that as per the agreement entered into that the tax burden will be borne by the Peoples bank itself. The conversation thus continued; Sunil Handunetti "That means it is paid through the bank. The Bank belongs to the Government and the Government also belongs to itself." Official from People's Bank Yes Honourable Chairman Sunil Handunetti "Rs. 180 million has been paid in such a manner. Do you pay the payee tax as well in this manner? Which means we pay on behalf of the Malaysian Company." Official of People's Bank "The treasury has informed all relevant state institutions regarding this, via circulars." Official of People's Bank "We brought down the owner of Silver Lake into the country and reached several agreements. Therefore, I am confident that we can enter into agreements which are beneficial to us, in the future." Official of People's Bank "We do not have the need to follow this system for a prolonged period of time, I can guarantee that. 4 to 6 months might be needed for us to familiarize ourselves with it." Sunil Handunetti "Then let us reach an agreement to come to a decision after six months, shall we?" Official of People's Bank "That can be done."   https://youtu.be/B0g50WrA128