Mega Co-op fraud jolts govt

by Shamindra Ferdinando
A sizeable stock of 20,000 metric tons of rice recently imported from India, to be sold through the countrywide network of Co-operatives, had been sold to Pettah wholesale market, authoritative sources said.
The sources said India had facilitated the speedy transportation of the stock of rice following Sri Lanka’s urgent appeal. Regrettably, the bulk of the stock had ended up at the Pettah wholesale market with racketeering traders and senior officials of Co-operative societies making a fast buck at the expense of consumers struggling to make ends meet, sources said.
Fielding questions, a senior government official revealed the Indian rice had been imported through the Co-operative Federation and Marketing Federation. Although documents maintained at the two national level cooperative organisations indicated that stocks of rice had been issued to various cooperatives, in fact influential Pettah dealers had taken delivery of the stocks. According to him, vehicles belonging to various co-operatives had been used to transport these stocks.
Despite President Mahinda Rajapakse personally directing relevant authorities to ensure the distribution of Indian rice through co-operatives, action hadn’t been taken to prevent, what a senior official called, a large scale racket.
Sources revealed a kilo of rice bought by co-operatives at Rs 52.50 had been sold to Pettah wholesale dealers at Rs 55 and in some instances at Rs 56. Although co-operatives had not suffered a financial loss due these transactions, the government’s move to stabilise the rice market by the swift distribution of the Indian stock hadn’t materialised.
Although many Co-operatives had sold their stocks in Pettah, only the Negombo Multi Purpose Co-operative Society had been caught, the sources said. A senior Co-operative official had been sent on leave without pay for selling 200,000 kgs of rice of two varieties. The stock comprised 170,000 kgs of Ponni and 30,000 kgs of Nadu. Sources said the Pettah trader who had secured this consignment paid just 25 cents more than the fixed price of Rs. 52.50.
Controversy surrounds the failure to ensure the distribution of Indian rice through the co-operative network despite Trade, Marketing Development, Co-operatives and Consumer Services Minister Bandula Gunawardena’s pledge to make available rice at an affordable price.
Sources also said the ministry had blocked the release of the Indian rice after the fraud was brought to its notice. Although the government recently categorised rice as an essential item, action hadn’t been taken either to fix prices or at least control prices.
Despite grandiose plans to celebrate the National Consumers’ Day in Kandy tomorrow (15), Consumer Affairs Authority (CAA) had failed to take any tangible action to protect the rights of the consumer. Recently, on Gunawardene’s request, Justice Minister Amarasiri Dodangoda set up a special Consumer Court as part the efforts to protect the consumer.
Well informed sources asserted that it wouldn’t be correct to blame the CAA as the ministry hadn’t decided on prices of different varieties of rice. Once that was done, the CAA would be able to impose a pricing formula.
Beside the CAA there was also a three-member Consumer Affairs Council, a statutory institute set up under the Consumer Affairs Act.
Gunawardene recently appointed Rumy Marzook, a former Prisons Chief who earned the wrath of a section of the officialdom for making a genuine bid to improve living conditions inside the country’s overcrowded prisons, as head of the CAA after lawyer Sarath Wijesinghe quit the post following a damning ruling by Chief Justice Sarath Nanda Silva. The minister also accommodated Lal Thalgaswatte, a former Sri Lankan Airlines country manager in France and his sister-in-law Ms Deheragoda, a former Director General of the Sri Lanka Standards Institution (SLSI). They are among the three working directors now in place.