Massive fraud in hedging Petroleum Corporation Chairman to be sued
Standard Chartered Bank awards Petroleum boss the title of best hedging dealer
(Lanka-e-News, November 19, 2008, 9.25 AM) Corruption Watch says that it will sue against the authorities of the Ceylon Petroleum Corporation (CPC) to charge back the public money lost due to the hedging gambling that caused massive losses to the CPC.

Corruption Watch that was set up for initiating legal action against the malpractices of the government said that legal advice will be sought in this regard soon.

Counsels Shiral lakthilaka, Ravi jayawardhana and former Navy intelligence officer Rohana Gamage participated in the inaugural press briefing of the Corruption Watch held in the National Library last evening (18).

Corruption Watch said that it would expose the government corruptions in due course and announced 060 2084735 hotline for the public to provide information.
Counsel Ravi Jayawardhana said that the CPC could sell a liter of petrol at Rs. 85 and a liter of diesel at Rs. 62 since the petroleum price has slashed by 60% in world market. But the profit goes to several banks and the pockets of several persons, he accused.

Mr. Jayawardhana rejected the claims of the government and the CPC Chairman that fuel prices could not be slashed due to high military expenses. He pointed out that the cabinet committee appointed to advise the CPC regarding petroleum hedging granted permission only for a limited amount like 30% of total purchases. However, the Chairman of the CPC had not heeded to the advice and the CPC is in debt of US dollars 300 million to the banks. That loan is needed to be paid by the government even if in case the CPC is closed, according to the agreement, he said. The banks engaged in hedging business are City Bank, Deaush Bank and Standard Chartered.

Due to this deal, the CEO of the Standard Chartered bank achieved a bonus of Rs. 60 million in 2008 and he expects to increase it to Rs. 100 million next year. Deaush Bank that recorded a turnover of 445 million last year increased it to 1029 million this year, Mr. Jayawardhana pointed out.

Mr. Ravi Jayawardhana said that the Chairman of CPC who was awarded as the best hedging dealer by the Standard Chartered Bank had signed agreements for hedging in 2009 as well. He said that the advantage of the de-escalation of petroleum prices could be given to public only if the government granted a subsidy to the CPC in this context. The profit of hedging was pocketed by several foreign banks and their agents and not by the state or the public, he said.

The Corruption Watch spokesman said that 170,000 metric tons of diesel was stored in Muthurajawela where there is a security threat and this stock is adequate for seven months. Most countries store fuel on monthly basis, Corruption Watch said.

Mr. Rohana Gamage said that late MP Sripathi Suriyaarachchi had lodged a complaint at Bribery or Corruption Commission in regard of the corrupt purchase of Mig aircrafts and still no investigation had been conducted. If an officer of this commission begins an investigation pertaining to corruption he is transferred in several months.

He said that many complaints likes of purchase of three cranes to harbor and the fertilizer fraud remain uninvestigated. Fraud Investigation Commission was made defunct and the government provided protection to the persons whose corruption was exposed by COPE report. The Fraud Investigation Commission has not conducted any serious probe in a year. Investigations that ask for high English knowledge are usually swept under the carpet since the poor knowledge of English of the officials of the commission, charged Mr. Rohana Gamage