Customs raids Harry J firm in continuing saga

A week after Distilleries Company of Sri Lanka (DCSL) acquired the balance 50 percent of shares of its arm, Periceyl (Pvt) Ltd from Pernod Ricard, the Customs raided Stassen Exports Ltd (SEL) on Tuesday searching for evidence pertaining to an investigation of Periceyl.

“We raided SEL and confiscated documents pertaining to Periceyl imports,” a senior Customs official told The Sunday Times FT.
The Sunday Times reported last week that Pernod Ricard, a leading manufacturer of expensive liquor brands in France, had decided to sell its 50 percent stake to DCSL for many reasons including the ongoing probe.

When The Sunday Times visited the Stassen’s complex at Grandpass as the raid was underway on Tuesday, journalists were not permitted to take photographs or enter the premises. Customs officers could be seen going through some boxes in a building inside the complex.

All these companies are controlled by top businessman Harry Jayawardene. Periceyl was importing brandy and vodka spirits under ethyl alcohol and paying a lower rate to the Customs, when it was raided by the Customs in July 2006. The company was found to have imported ethyl spirit such as gin, brandy and vodka under ethyl alcohol which is the base spirit for arrack. The latter is cheaper at US$0.62 cents (CIF) and the duty is charged at Rs.125, whereas for ethyl spirit the CIF price is US$ 5 to $ 100 per litre. Here the duty varies and the items are taxed at Rs.825 to Rs.880 per litre.

“Since the Customs raid a year ago, the company hasn’t been importing these spirits. However last April it got down a ‘grape wine spirit’ container paying the proper duty (at the highest rate). The Customs investigated as to why the company was importing these spirits. When the Customs questioned the General Manager Senaka Amaratunga, he said that it was to manufacture different varieties of whisky, after which we released the shipment with a 200 percent bank guarantee,” the official said.

He said early this month the Customs received information that Periceyl was in fact manufacturing brandy as before and not any ‘new’ spirit. Mr. Amaratunga was questioned on July 16 by the Customs and he had stood by his original story. On July 17 Customs raided the bottling plant in Seeduwa and the Excise Department official, who was at the plant, confirmed as did the bottling plant stores officers that it was the same old product that was being manufactured, the official said.

Customs officer Sanath Fernando who headed the investigation refused to comment. When asked where the investigations was at the moment, he said, “Nothing has come out. I went for a discussion to the Customs.” He said Periceyl had been manufacturing the same spirits for a long time.

When The Sunday Times FT contacted Customs Director General Sarath Jayatilake he said there ‘may’ have been a raid at SEL. He confirmed that the investigation was ongoing. Asked whether Customs could act against any former (French) employees of Periceyl, Mr. Jayatilake said in such a scenario, the ‘importer’, those assisting in the imports and the importation procedures have to be analysed. He said action could be taken against all parties.

The Customs official however said action cannot be taken against the French company or its directors but he could inform the French Customs who in turn will act accordingly. The official said that Amila Kannanagara, the accountant at Periceyl was called for questioning on Monday and he had said that documentation for Periceyl was handled by SEL.

“The Customs raided SEL on Tuesday and is in the process of going through each document to find out whether Mr. Kannanagara has told the truth. If Stassen is not handling the documentation contrary to what Mr. Kannanagara said, action will take against him for misleading an investigation,” he said.