The Committee on Public Enterprises (COPE) has recommended that the conversion of the Sri Lanka Institute of Information Technology (SLIIT), formerly part of the Mahapola Fund, into a fully private institution is unlawful. COPE has called for immediate legal action to restore the institution under the control of the Mahapola Trust Fund.
In line with this recommendation, COPE Chairman Dr. Nishantha Samaraweera has directed the Secretary to the Ministry of Trade, Commerce, Food Security and Cooperative Development, K.A. Wimalenthirarajah, and the Chairman of the Mahapola Trust Fund, former Supreme Court Justice Vijith Malalgoda, to take necessary steps to implement this decision.
These recommendations emerged during the COPE session held on the 9th of this month, convened to review the Auditor General’s reports and assess the performance of the Mahapola Fund for the years 2022 and 2023.
The committee extensively discussed the process through which SLIIT’s assets were acquired in 2015. This acquisition, done with the consent of the then Minister and based on a Cabinet decision, involved a payment of Rs. 408 million by SLIIT to the Mahapola Fund. COPE noted that it was problematic for an institution originally belonging to the Fund to pay such a sum back to the Fund in exchange for ownership—deeming the transaction illegal.
Chairman Dr. Samaraweera stressed the importance of preventing such fraudulent and illegal practices in the future, underscoring the need to hold those responsible accountable.
Addressing the committee, the ex-officio Minister of Trade and founder of the Mahapola Fund, Wasantha Samarasinghe, stated that such fraudulent activities will not be allowed to fade with time and assured that further investigations will follow.
An official opposing the privatization informed the committee that SLIIT was initially founded as a state institution with a board comprising officially appointed state representatives. However, driven by the potential for high profits and money laundering opportunities, the institution was unlawfully removed from government control.
The committee also addressed concerns that ongoing investigations could be misrepresented as a threat to the existence of a university attended by thousands of students. It was emphasized that SLIIT must continue to operate without disruption, but its trusteeship should be reverted to the Mahapola Fund. Through this, a greater number of students would have access to degree programs at subsidized rates.
Attention was also drawn to administrative deficiencies during the previous government, particularly the failure to fill key positions such as the Internal Auditor of the Mahapola Fund. COPE flagged this lapse as a significant operational issue, especially for an institution managing a large volume of financial transactions.
The current status of companies under the Trust Fund, namely National Wealth Corporation Limited and C/S Natwealth Securities Limited, also came under scrutiny. Citing major concerns over the reinvestment of Mahapola funds into loss-making entities, the committee resolved to conduct a forensic audit and take further corrective measures.
The committee further explored the feasibility of extending Mahapola scholarships to a larger pool of eligible university students. The Chairman of the Fund reported that efforts are underway to ensure equitable distribution of benefits through prudent management of income generated from the current capital base of Rs. 20 billion.
Additional issues raised included the 2023 appointment of trade show officers on two-year contracts and the cancellation of a selected lottery operator for an online lottery initiative—an action that resulted in a Rs. 750 million loss to the Fund. The committee instructed the relevant officials to initiate a forensic audit and implement appropriate actions.
The committee meeting was attended by Members of Parliament including Attorneys-at-Law Dayasiri Jayasekara, S. M. Marikkar, Nilanthi Kottahachchi, Samanmali Gunasinghe, Sujeewa Dissanayake, Jagath Manuwarna, Ruwan Mapalagama, Asitha Niroshana Egoda Withana, Thilina Samarakoon, Chandima Hettiarachchi, Lakmali Hemachandra, and Dinesh Hemantha.
Also in attendance were former Secretary to the Ministry of Trade, Commerce, Food Security and Cooperative Development, Mr. P.M.B. Atapattu; Secretary to the Ministry of Education, Higher Education and Vocational Training, Mr. Nalaka Kaluwewa; and a group of senior officials.
