Krrish denies making any pay-offs
One of Sri Lanka’s biggest mixed development projects on Thursday strenuously denied allegations of wrongdoing even as more details emerged this week of one of the country’s worst financial scandals.
The India-based Krrish Group, involved in a US$650 million project which includes a hotel, apartments and two towers linked to the other similar to the Petronas Towers in Malaysia, told the Business Times (BT):
The Krrish land in Fort
“The approval to the project has been done on merit and is in the interest of the development of Sri Lanka. The allegations of pay-offs or bribes are not true,” company CEO R.P. Gupta said responding to queries sent by the BT by email to the company.Allegations swirling in Colombo together with reliable information pieced together by the BT revealed that the top official holding positions in the public and private sector who is alleged to have received a Rs. 400 million pay-off to ‘support’ the project has implicated many other high-ranking personalities including a politician and another highly-placed public official with links to the private sector.
The Finance Ministry and the CID were separately probing the alleged fraud with CID sleuths also following up on the possibility that missing files on accounts from Colombo’s Krrish’s office was done with the connivance of some highly-placed company officials.
“A senior official still holding a top position in the government who is involved in the scandal will tender his resignation if the case turns towards him in the next couple of weeks,” a Finance Ministry source said.
Earlier reports said that some company officials had ‘spilled the beans’ of the pay-offs resulting in an investigation being ordered by the Government.
On Wednesday, Investment Promotion Minister Lakshman Yapa Abeywardena said the company has to make a final lease premium payment by tomorrow, July 15 otherwise it would lose its ‘Strategic Development Project’ status in which several tax concessions are granted. However any extension of the deadline would be considered, he said. Mr. Gupta said the balance payment of about Rs. 700 million (around 14 per cent of the total lease premium) would be made soon with the due interest as per the agreed terms of payment.
He said the Krrish Group had discussed and taken guidance from various government authorities and other persons to understand the
Minister Lakshman Yapa Abeywardena
various aspects, the Government’s policy framework, growth of tourism and Industry, and other inputs for taking the investment decision on the project.
According to official records, the company has leased a 4-acre land for 99 years at a lease premium of Rs. 5 billion. While 10 per cent of the total has been paid in the beginning, another Rs.1.4 billion totaling to Rs.2 billion had been paid by Krrish group as at late December 2012
Out of Rs. 4,995 million due for land leased for a mixed development project, the company had so far paid Rs 4,049 million or 81 per cent.
The BT investigation also revealed that the official implicated in the alleged fraud has also utilized millions of rupees on overseas promotion trips; was not reappointed as a board director of a key development agency and has issues at another healthcare facility where he was a non-working director.
Treasury Secretary Dr. P.B. Jayasundera had summoned top officials of the Urban Development Authority and asked them to submit documents relating to the land deal and project proposals.
In the course of that discussion it was revealed that some files and documents were missing from Krrish’s Colombo head office. Concern was also raised by the Treasury Secretary on Krrish’s credentials in India. The President, the BT learns, has been briefed on the entire Krrish transaction.
The investigation is also focusing on whether some local Krrish officials had defrauded their own company. One Krrish official had spent Rs.60 million on advertising and also and taken a huge commission in awarding the piling contract to a Colombo company. This official has also been accused of forging documents of the company to gain personnel benefits, the BT investigation showed.
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