Lanka Sathosa Ltd. was called before the Committee on Public Enterprises (COPE) on 22 June under the chairmanship of Member of Parliament Prof. Ranjith Bandara, during which it was discussed that by importing and selling goods, Lanka Sathosa had forfeited the opportunity to sell goods at a lower price to customers and subsequently gain more profit by buying and selling goods from Pettah.
Furthermore, the officials explained losses due to delays in receiving money although the goods are imported according to policy decisions taken by the Government.
The COPE Chair emphasised the need to prepare a business model suitable for Sathosa. The Auditor General also pointed out internal administrative weaknesses as well as the need to establish the institution under a business model that can make decisions independent of external interference.
The committee also emphasised the need to attract more customers to Lanka Sathosa stores.
Attention was drawn towards the fact that a concrete plan for 2021-24 was in place but was not approved by the ministry. Thus, the Committee Chair informed the officials to prepare a comprehensive plan until 2028 and report on its activities within two months. He further instructed the preparation of an action plan.
It was discussed that although there are 21 internal auditor staff, only three audit queries had been submitted for the year 2021 and none for the year 2022. Moreover, attention was drawn to the auditor’s difficulty in obtaining information regarding the company’s accounts. Accordingly, the Auditor General also informed that the Internal Audit Department should be notified in this regard through an internal circular.
It was disclosed that during 2014-2015, there was a loss of Rs.6 billion due to the importation of rice through Lanka Sathosa. It was also discussed that the imported rice had expired and was sold for animal feed. A report has been prepared by the Auditor General regarding this incident and thus it was decided by the committee to discuss this matter in the future.
The Chair also said that Lanka Sathosa’s losses in 2022 amount to Rs.600 million. It was also discussed that the total loss recorded on 31 December 2021 was close to Rs.15 billion.