A former top minister has been accused of misusing his ministerial powers which has resulted in the Government having to bear huge financial losses.
The former minister (name withheld) operated a small communication center in Kadawatha before entering parliament. He has been accused of acquiring wealth running into millions within a short span of time after extending his support to former President Mahinda Rajapaksa.
It is alleged that the former minister had used his powers to offer super luxury houses as gifts to his kith and kin when he was in the Government.
The former Minister, who is still a member of parliament, had allegedly given away five out of six houses constructed by one of the companies which came under his purview to his relatives, at prima locations in Maththegoda and Kahathuduwa.
“We have documents to prove that these parties have sent small pieces of paper to the then Chairman of the construction company requesting from them to grant his relatives houses. Interestingly, these requests have been granted within less than two weeks without even checking whether these parties are financially sound to pay back the money within 24 months,” an employee attached to the company told The Sunday Leader on condition of anonymity.
According to the sources, the former minister’s family has been keen on obtaining one of the houses since the time the construction work commenced and added that instead of signing a contract before the houses were handed over, the relevant company has only obtained a down payment of 10% of the total value and given away the houses to the former minister’s relatives without placing any conditions.
“Although the houses built are sold at the market value, the two houses that were built at Maththegoda and the four houses at Polgasowita were not sold at the market value but were given away for a down payment of 10% waiving secretly the rest of the money,” sources said.
Sources further said that had the former regime was given yet another mandate on January 8, to further govern the country these houses which cost around Rs.12 million each would have given free of charge to the former Minister’s relatives.
“If the Developer sold these houses following the government procedure, then the company should have entered into agreements with the parties and should have asked them to pay the monthly installments which they have never complied with,” sources alleged.
It is learnt that it was only after the change of Government and a new Board of Directors were appointed to the construction company the former minister’s involvement in the housing racket was unearthed.
Meanwhile, complaints had being lodged about the scam with the newly appointed Financial Fraud Bureau, Colombo while the former minister himself is now under the investigation of the Commission to Investigate Bribery or Corruption as to how he acquired such a vast wealth within a short period after extending support to Mahinda Rajapaksa when he was the President.
Sources at the construction company further accused their former Chairman and Board of Directors of allowing the former Minister to misappropriate public property.
“It is public money that has been spent on constructing these houses. It is neither the Board of Directors’ nor the former minister’s private money. The former minister’s brother and sister had benefitted from the two houses in Maththegoda valued at Rs.14.544 million and Rs.15.132 million respectively while four houses in Kahathuduwa were given to the former Minister’s brother-in-law, sister-in-law, nephew (sister’s son) and an officer attached to the Presidential Media Unit during the previous regime who is now attached to the Urban Development Authority Media Unit,” sources claimed.
Meanwhile it is also learnt that the Financial Fraud Bureau has summoned the present Chairman of the construction company and has taken a statement from him over the misappropriation of public funds during the previous management and according to sources, the former minister has not only played out public money by giving the luxury houses valued to the tune of more than Rs.70 million but also has rented out the ground floor of the construction company to one of his friends for a restaurant to an underestimated monthly rental.
“It is up to the Financial Fraud Bureau to question the Board of Directors and the former Minister how this happened. Although the buyer has to pay 10% down payment when obtaining the house, the company has allowed some parties to pay only 5% of the value and after making the first installment they have not paid a cent to the developer. It is surprising why the Board of Directors did not take any action to recover the monthly installments from these house ‘owners’” he added.
According to sources, violating the rules and regulation of the construction company, the previous management has given away these houses without sales agreements with the buyers, leaving many loopholes for the buyers to slip away from paying the money back to the developer.
“Hence the houses situated at the ‘Haritha Kedella’ housing scheme at Maththegoda which is valued at Rs.15.132 million has been given to a resident of Maviththara, Piliyandala and the house on another plot at the same housing scheme which was valued at Rs.14.544 to a resident of Maharagama. Meanwhile four houses at the ‘Haritha Kedella’ housing scheme in Kahathuduwa were given to a resident of Polgasowita together with another house valued at Rs.9.434 million, another house valued Rs.11.374 million to a resident of Kundasale, a house valued at Rs.10.361 million to a resident of Madapatha and a house valued at Rs.12.154 million to a resident of Morawaka. Except for the last recipient all the others are the former minister’s own family members,” sources claimed.
According to the sources, it was only after an inquiring committee headed by a retired Judge was appointed to look into the misappropriation of public funds at the construction company that the former Minister’s relatives handed over the keys of the said houses back to the developer claiming that they do not have funds to pay for the houses.
“When they obtained these houses, didn’t they know that they will not be able to pay back the money as they do not have any proper income? Did they realise it only after the fall of the former regime? Even after the fall of the former regime in January this year, why did they still continued to stay in these houses until the inquiring committee was appointed? This shows that they did not expect to fall of the previous government and may have thought that the scam would not come to light. Only after realising that they are under scrutiny they handed over the six houses a few days ago,” sources said.
The sources further said how the previous management has rented out the ground floor of the construction company to a Japanese Restaurant owned by a close associate of the former minister’s for Rs.50, 000 per month.
“On whose directive did the former management rented out their ground floor to the Japanese Restaurant? Yet another financial irregularity has taken place when renting out this space in a prime location in Colombo. Who has decided to rent out this building space for only Rs.50,000 per month and who has approved the decision? All these are financial irregularities and have to find out who is behind this scam,” he added.
When contacted the Chairman of the construction company confirmed that he has been asked to make a statement to the Financial Fraud Bureau on misappropriation of funds by the former management.
He also said that the truth will prevail and he would wait to see the outcome of the police investigation.
“All these houses have been given on request which is the normal procedure. It was a unanimous decision taken by the Board of Directors and there is nothing wrong of giving these houses to those who sent applications. This government is now trying to sling mud at us to which we will give the correct answer in due course,” he said.
When asked whether he knew that all those houses except for one have been given to the former Minister’s family members, the Chairman said that he does not know who the owners are and that it was not his duty to find out the relationships. He further said that there is no necessity for the present regime to level baseless allegations, as the construction company has not lost a cent by giving the houses to these parties.
“As the house owners have found difficult to pay back the monthly installments, they have returned the houses to the developer and hence they now own the property and had not lost a cent from this bargain. So why are they blaming the previous regime and the management claiming this is a loss to them,” the construction company chairman asked.
However he did not want to make any comment when asked why they have not signed agreements with the buyers before handing them the house keys and why they did not send them warning letters when they have failed to pay the monthly installments over the past one year, claiming that he cannot make any comment as the matter has now referred to courts by the Financial Fraud Bureau.
Meanwhile, the former minister has been accused of acquiring wealth to own one mansion and constructing the second on the same compound worth of over Rs.70 million at Mangala Mawatha in Hokandara South.
Amongst the allegations levelled against the former minister are: Where from they got money to construct two houses in Hokandara? How he earned money to get a 25-room hotel built on a 13 acre land in Waga, Padukka? Who gave money to the former minister’s wife to own a garment factory in Kalutara? From where did the money come to own shares of a production house in Polwatte, Pannipitiya etc.
“Who knows if the construction company employees built former minister’s houses at Hokandara and the hotel in Padukka. Unless a full scale investigation is carried out we cannot find what the other frauds the former minister was involved in during his six year tenure with the former regime,” sources claimed.