… payment was made after China blacklisted state-owned bank

After his failed bid to secure anticipatory bail in respect of a case handled by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), regarding the loss of USD 6.9 mn caused by the procurement of substandard organic fertiliser in 2021, former Agriculture Minister Mahindananda yesterday (19) surrendered to the Colombo Chief Magistrate.

Chief Magistrate Thanuja Lakmali remanded him till 26 May pending further investigations. The court issued an arrest warrant last Friday (16) after he filed an anticipatory bail application.

Earlier, Investigation Officers of the Commission arrested former Additional Secretary (Development) to the State Ministry of Agriculture, Mahesh Gammanpila, on 28 April, for causing approximately USD 6.9 million loss to the government by giving instructions to open the suspended Letters of Credit to import the substandard organic fertiliser consignment from Qingdao Seawin Biotech, China, in 2021/22.

Gammanpila was granted bail on 05 May.

China removed Sri Lanka’s state-owned bank from a blacklist days after it made a payment for an organic fertiliser shipment that government authorities had rejected.

The bank settled the disputed payment of 6.87 million US dollars in January 2022 to China-based Quindao Biotech Group and honoured its Letter of Credit (LC) for the organic fertiliser consignment ordered by the Ceylon Fertiliser Company and Colombo Commercial Fertiliser Company Ltd.

The fertiliser company got a court order barring payments, after the consignment of fertiliser was found to contain the harmful Erwinia bacteria on a post-shipment examination.

China’s Qingdao Seawin Biotech Group Co. Ltd., demanded USD 8 mn from the agency, alleging negligence, claiming that Sri Lankan authorities had not followed proper standards in the sample tests.

The company insisted that the fertiliser had been cleared in a pre-shipment examination.

The court order, blocking the payment, was vacated on 03 January, 2022, allowing the bank to settle the payment. (SF)