Attempt to acquire a finance company using Mahapola funds revealed
Financial misappropriation and irregularities allegedly committed in thesetting up of a private company called National Wealth Corporation Ltd in 2003 to manage the funds of Mahapola Scholarship Trust Fund came to light again following a new move of this company to a acquire a finance or leasing company adopting a similar tactic after almost 10 years, informed sources revealed.
This move was not in accordance with the Central Bank’s plan to consolidate Sri Lanka’s financial institutions, a senior government official who wishedto remain anonymous told Business Times.
He said that National Wealth Corporation Ltd and NatWealth Securities Ltd, subsidiaries of NatWealth Group, are negotiating with government authorities to enter into finance and leasing business acquiring a non banking financial institution registered with the Central Bank.
University students too have expressed grave concern about the dangers posed to the Mahapola Scholarship Fund due to this situation and vehemently protesting against it.
They asked as to how this fund management company which was formed in 2003 without a proper approval and knowledge of the authorities by using money allocated for the welfare of university students is going to make a hugeinvestment to acquire a finance company and for what benefits.
A senior government official said that these financial misappropriation issues have not been rectified to date although it had been pointed out in Auditor General’s Report as matters of continuous nature.
The NatWealth Group was set up with the objective of enhancing the returns to the Mahapola Higher Education Scholarship Trust Fund by engaging in various fund and fee based activities.
According to Auditor General’s report 2011, “In terms of the MahapolaHigher Education Scholarship Trust Fund board paper No 39/03 dated 13th May 2002, a private company had been established on 23rd March 2003 with an initial capital contribution of Rs. 200,000,000 with an expectation of fund management to be able to earn higher income by investing the surplus money belonging to the fund in the competitive money market.
However the approval of the minister of finance had not been obtained for the investment in terms of section 82.3 of the Public Enterprises circular No PED / 12 OF 02 June 2003.
The total amount given from the fund to the company as at December 2011 for management was Rs. 5,125,294,995.”