Milinda Moragoda - Allegations of Corruption

Allegations of Corruption

In 2007 Moragoda's party was in the opposition having lost the 2005 elections to the UPFA. As the UPFA Government sought to expose corruption during the UNP regime the Parliamentary Committee on Public Enterprises (COPE) released a report accusing Moragoda of widespread corruption and abuse of power.

Mercantile Credit Ltd, a subsidiary of Mercantile Merchant Bank, founded by Moragoda was found to defaulted on loans of 4.7 Billion Rupees (which had been obtained by providing false information) while Moragoda was Minister for Economic Reform. COPE conducted three inquiries into these loans and their defaulting but on each occasion the investigations were never allowed to reach the final stages due to political pressure.

In 2002 Lanka Marine Service (Pvt) Limited owned by state-owned Ceylon Petroleum Corporation which sat on a 8.5 acre plot in the Colombo harbor was sold to the Sri Lankan conglomerate John Keells Holdings. The Supreme Court ruled that as then PERC Chairman, Dr. P.B. Jayasundara and Executive Director of JKH Susantha Ratnayake had acted with dishonest intent in the sale of LMSL shares. The Bribery Commission also began investigations into criminal chrges against Dr. Jayasundara, former Ministers Milinda Moragoda (PERC was under him) and Karu Jayasuriya (CPC was under him) on the charge of abusing public property in connection with this deal.

Before the investigation could reach conclude both Moragoda and Jayasriya crossed over to the government. Reporting on the privatization of Lanka Marine Service COPE stated that by his actions Moragoda had at the very least incurred a loss of 1.7 Bn rupees for the government.

The COPE report also alleged severe irregularities in the privatization of Sri Lanka Insurance which happened under the tenure of Moragoda. The report stated that Moragoda created a loss of over 3 Bn Rupees for the government solely through non-compliance with the 4th term of the contract. These investigations too were not concluded before Moragoda crossed over to the government.