CID probes paddy fraud

The Criminal Investigation Department (CID) is probing an alleged large scale paddy fraud in Kurunegala that is estimated to have cost the State more than Rs 100 million.

The disappearance of paddy stocks from four storage facilities belonging to the Paddy Marketing Board (PMB) in the Kurunegala District had occurred during the 2021-2022 period, though the fraud was uncovered only recently, the Agriculture Ministry claimed. An inventory of the paddy stocks revealed that 971,050 kilograms of paddy in these four storage facilities were missing, the Ministry said.

Paddy stocks are found to have gone missing from the storage facilities at Polgahawela, Anamaduwa, Nikaweratiya and Mahawa.

The PMB’s Kurunegala regional manager was among five officials interdicted over the incident. The other four officials were assistant regional managers who were in charge of the storage facilities, PMB Chairman Buddhika Iddamalgoda told the Sunday Times.

The PMB handed over a report regarding the alleged fraud to Agriculture Minister Mahinda Amaraweera on Tuesday (7). Presently, three separate inquiries are ongoing into the incident. The PMB is conducting an internal audit and an initial inquiry while the CID is carrying out a criminal investigation.

The CID investigation is being conducted to determine if only the interdicted officials were involved in the fraud or whether they were part of a much larger network.

There are two possible scenarios regarding the missing paddy stocks, Mr Iddamalgoda said. One scenario is that the interdicted officials surreptitiously sold these stocks to outsiders. The second scenario is that the officials actually did not purchase as much paddy as their books claimed.

During the period the fraud had occurred, the government of former President Gotabaya Rajapaksa was engaged in its organic fertiliser programme after banning the import of chemical fertiliser. The government was desperate to show that the scheme was working, so it authorised regional PMB managers to purchase 16 percent of the paddy harvest rather than the usual 14 percent, said the PMB Chairman. It may well be that the interdicted officers had simply “cooked the books” to reflect that they had purchased non-existent paddy stocks and then pocketed the money released to purchase them, he noted.

The fraud was detected following a tip-off received regarding irregularities at the Nikaweratiya PMB storage facility. There had been no internal audit of paddy stocks at the PMB’s storage facilities since 2018, while its stock books had not been reviewed since 2014, the PMB Chairman revealed. “We commenced both an internal audit and a review of the stock books, given this situation, and we first focused on the Nikaweratiya storage facility. It was then that we discovered that paddy stocks were missing at three further storage facilities in Kurunegala. Evidently, those involved did not expect that we would be conducting checks.”

National Organiser of the All Ceylon Farmers’ Federation (ACFF) and former Janatha Vimukthi Peramuna MP Namal Karunaratne claimed it was their revelations about corruption at the Nikaweratiya PMB storage facility that prompted the PMB to act. Mr Karunaratne alleged that the fraud is more extensive than what either the Agriculture Ministry or PMB have acknowledged. “Agriculture Minister Mahinda Amaraweera says this fraud had occurred before he took over, which means he is pointing the finger at his predecessor Mahindananda Aluthgamage. But he can’t absolve himself simply by saying it had happened before his time. We have documents showing that officials have been paying commissions to rice mill owners for the non-existent paddy stocks this year as well.”

The ACFF national organiser stated that the current agriculture minister, the previous minister as well as the current chairman of PMB and its former chairman bore responsibility for the fraud. “Given the scale of the fraud, far more people, especially at senior levels, have to have been involved.”

Agriculture Minister Mahinda Amaraweera dismissed Mr Karunaratne’s allegations against him and the current senior leadership of the PMB. “It is clear that the stocks have gone missing in 20212022 which was before our time. The CID is investigating the matter now and the probe will determine if there were others who were involved,” he stressed.

All Ceylon Farmers' Federation national organiser Namal Karunaratne and representatives of the federation at the PMB's Nikaweratiya storage facility on Friday