• AG yet to respond to CPC’s 2013 request
• Audit calls for urgent action to recover losses

The Ceylon Petroleum Corporation (CPC) is still awaiting a legal opinion from the Attorney General’s (AG) Department regarding the controversial hedging transactions carried out between 2007 and 2009 – a matter that has remained unresolved for over a decade.

According to the latest 2023 audit report on the CPC, the total financial loss to the country from these hedging transactions stood at Rs. 14,028 million as of 31 December 2023.

The report has also revealed that Commercial Bank has filed a case against the CPC at the Commercial High Court in Colombo, seeking a claim of $ 8.6 million in connection with these transactions. 

In response, the CPC has filed an appeal in the Supreme Court against a preliminary objection order in the case. The Supreme Court’s judgment on this appeal is currently reserved.

According to the report, despite the scale of the financial loss and ongoing legal proceedings, the CPC has yet to receive formal advice from the Attorney General’s Department on possible steps to recover the losses incurred through these transactions. 

Notably, the CPC had first sought the Attorney General’s opinion on legal action back in 2013, but no formal response has been provided to date.

CPC Managing Director Dr. Mayura Neththikumarage confirmed that the corporation had not received any recent updates or official communication about the lawsuit.

“We haven’t received any new developments on that recently. There was a case earlier, but no fresh communication or updates have come through,” he stated.

When asked whether the case remained active or whether Commercial Bank was still pursuing legal action, Dr. Neththikumarage replied: “I’m not sure if the case is still active. It was a major case back then, but recently there’s been no discussion or notification about it.”

He further indicated that clarification could be sought from either the AG’s Department or Commercial Bank, as the 2023 audit report referenced the matter as still pending.

In a brief comment, Attorney General Parinda Ranasinghe acknowledged a lack of up-to-date information on the case and stated that further details could be obtained in the coming week to verify its current status.

The National Audit Office, in its report, has recommended that the CPC urgently take appropriate action to resolve the long-standing issue and explore legal options to recover the substantial losses suffered through these hedging transactions.