What Corrupted Piyadasa Kudabalage

MD/CEO of Litro, did under MaRa

(Lanka-e-News- 13.Feb.2015, 11.55PM)

Perpetration for Corruption-For the purpose2011 Tender bid evaluations and making
recommendations, a Technical Evaluation Committee (TEC) and a Cabinet Appointed
Procurement Committee (CAPC), under the leadership of Dr. R.H.S.Samaratungawere
appointed by the Department of Public Finance of the Ministry of Finance Planning. The team
completed the process and prepared the draft Cabinet Memorandum. Mr. Piyadasa
Kudabalage(MD/CEO) was not happy about this process and In November 2011, MD/CEO
decided to stop the Cabinet approval process and awarded the tender by himself to create a
precedent that, Litro doesnt require to follow government procedures in future and MD/CEO
has the total freedom to manage Litro as his own private company.( Note - Annual Value of the
Negotiable component of the tender is Over 2.5 Billion Rupees whereas the Total Tender Value
is over 16 Billion Rupees).In this instance MD/CEO is guilty to the act of violating CAPB
process.
MEGA LPG Deal -Unilaterally signed a Contract to supply LPG for an extended period of

Two (2) years for a volume of 320,000 Tons in the middle of the formal tendering process,
without informing the Internal tender committee or the Management Team. During the
tendering process, which was started in March 2013, all reputed regional suppliers showed a
strong interest and LPG Trader SIETCO ( Shell LPG arm in Singapore) visited Litro Gas on
the 30th April 2013 to demonstrate their commitment and had a joint meeting with the
MD/CEO, Sales &Marketing Director(S&MD) and Operation Director(OD). During this
discussion, MD/CEO asked the possibility of offering a Premium of less than 120 US$/Ton for
a two year period and they responded positively, adding that, the premium can be much more
competitive than the number he indicated for a two year term contract, however, as per the
shell business guide lines, he is unable to discuss the exact numbers in the middle of a formal
tendering process. This was confirmed by an email communication as well. However, to the
dismay of honest employees, it was later revealed that MD/CEO, Financial Controller(FC)and
the Procurement Manager(PM) had secretly signed a contract on the 06th May 2013 and as per
this contract, the prices were inflated by 9 US$/ Ton to 135 $ during the first year and by 14
US$/Ton to 140 $ during the second year, at a time the market premiums were declining due to
reduced Piracy activity and other supply demand factors, which was confirmed during the
above meeting by one reputed regional LPG supplier namely SIETCO. In this instance
MD/CEO, FC and PO are guilty of orchestrating and executing a corrupt deal making a loss of
over 700 Million to the GOSL.
Purchasing Off Spec LPG Cargos- On the 01st June 2013, above corrupt contract came into
effect after exchanging a massive amount of money as explained above. Thirteen (13) days
after starting the contract, supplier sent a ship Gas Husky, carrying an Off Spec cargo. Upon
establishing the inferior quality of product ( Through Independent surveyor and CPC refinery
laboratory) the Terminal Manager(TM ) in consultation with the OD, refused to accept the
ship. MD/CEO made every effort to unload the ship, but above officers maintained their
integrity and didnt accept the ship. MD/CEO accused those honest officers saying Saboteurs
and under severe pressure from the supplier, he made a last ditch attempt by sending one of his
corrupt staff PM to the Commercial Anchorage ( This is the first time in the history a company
employee went to the commercial anchorage ), advising him to bring a good sample. In his
little knowledge and confused mindset, he failed to understand the difficulty in changing the
composition of LPG sample, which is drawn into a sample Bomb. Truth prevailed, that sample
also failed the test. However, MD/CEO made the full payment to the unloaded cargo, without
any deduction and advised operations staff to fill the substandard product directly into
domestic Gas cylinders, giving a further punishment to poor consumers. In this instance
MD/CEO, FC, PM are guilty of producing fraudulent payment documents, authorizing and
making irregular payments, without making deduction for quality variations.
Purchasing Spot LPG Cargos at Fixed Price- After signing the above contract, the supplier
(OTI) started experiencing technical issuesresulting quality issues as explained above, leading
to product shortage in Litro. MD/CEO took initiative to find alternate suppliers, to cover the
shortage to fulfill his obligations to protect the supplier and Corrupt deal. In doingso, he
purchased a LPG shipment of 3,000 Tons (Sapphire 1) from a supplier named Royal Gas in
June 2013 at a Premium of 135 US$. It is practically impossible to purchase a spot cargo on
urgent basis, at the same price of a well negotiated longTerm contract price. As such, he made
it clear to the whole world that, he had inflated the Term contract price, by being able to buy an

urgent spot cargo at the same price. Not only that, by matching the Spot price to the inflated
Term contract price, he made another corrupt act by inflating the spot price also. This instance
prove beyond any doubt that MD/CEO, FC and PM are guilty for the offence (2) above,
whereas MD/CEO, FC and PM are guilty of inflating the price of Spot Cargo to cover up the
second offence , making further losses to the GOSL.
Purchasing a Distress LPG cargo at a higher price- The above Ship Sapphire 1 , which was
planned to arrive in June 2013, developed mechanical failures leading to unprecedented delays
and product shortage at Litro. The ship had a final major failure in the vicinity of the CBM
( Litro discharge point), making it impossible to move the ship with the load. However, after
much effort, they managed to bring the ship to the CBM. As the ship was carrying 6,000 tons, it
was not in a possible her to continue her voyage withthe remaining load of 3,000 Tons,
resulting a distress cargo and was compelled to unload at any cost. In this occasion MD/CEO
demonstrated his never ending greed for money by agreeing to buy the remaining cargo not
only at the same Premium of 135$, but at the following months (July) Saudi Contract Price
(CP ) of 791.5$, which was 29 $ higherthan the June CP of 762.5 $.This higher CP payment
alone made a loss of over 11 million US$. It is very clear, thecombined (inflated CP and
premium) income made by MD/CEO from this distress cargo quantity of approximately 3,000
tons shall exceed 25 Million Rupees. In this instance MD/CEO, FC and PO are guilty of
orchestrating and executing a corrupt deal making a loss of over 25 Million to the GOSL.
Accepting Unsolicited Offers for LPG Supply- MD/CEOcontinue to procure LPG
shipmentsfrom Royal Petrol at a set premium of 135 $,on random basis by manipulating LPG
ordering quantities against his corrupt Two year supply contract. Another such occasion is
procuring a LPG cargo of 3,750 Tons from Royal Petrol by the carrier Globe Tanya at his
fixed premium of 135$. A total payment of about 450 million was made and a minimum of 10
Million was robbed by this deal with the help of his loyal FC and PM.In this instance again,
MD/CEO, FC and PO are guilty of orchestrating and executing a corrupt deal making a loss of
over 10 Million to the GOSL.
Continuation of Purchasing Off Spec Cargo- Under obligation to the supplier, MD/CEO
continue to procure off spec LPG cargos from the main supplier and to facilitate this process,
his loyal Procurement Manager changed the Independent Surveying Party (who was doing an
honest job), to produce results of his choice. However, most of the Bulk customers with
sensitive operation controls, continue to complain about the product quality. But MD/CEO
couldnt take any action to penalize the supplier due to his obligations. In this instance
MD/CEO and PM are guilty of conspiring to manipulate LPG test results in order to receive
Off Spec cargos, leading to customer dissatisfaction and loss to the GOSL by making irregular
payments, without making deduction for quality variations.
Presidents Birth day Gift- InNovember 2013, MD/CEO showed his interest to bring a LPG
ship to Hambantota port in line with the Former Presidents Birth day, ignoring the advice of
senior management. As the freight rate was reducing drastically due to reduced piracy activity
and market trends, procurement manager was advised to call EOIs. But as usual, PM ignored
all basic procurement guide lines with the blessings of MD/CEO and purchased about 1,600
Tons from his Black market friend Royal Petrol, making over 7 Million Rupees. Interestingly,
on this occasion also, the premium paid was 135 $ and the value of purchase was over 225

Million, at a time SIETCO (Shell) submitted an offer to supply LPG at a premium of 100$.
This is clear evidence of price fixing. How can the same supplier Royal Petrol supply a
smaller parcel of 1,600 Tons to a faraway location at the same premium of 135$?Isnt this
enough to prove beyond any reasonable doubt that, the Market Premium is around 100$ ,
whereas he signed a Two year corrupt deal @ 135$ and 140 $. Isnt this enough to send this
MD/CEO, FC and PO to prison for corruption?The loss to Litro didnt stop here. After holding
this for months, MD/CEO ordered operations department to transport this LPG by truck to
Kerawalapitiya wasting millions of rupees. In this instance also, MD/CEO, FC and PO are
guilty of orchestrating and executing a corrupt deal making a loss of over 8 Million to the
GOSL.
Procurement through Negotiations- During the year 2013 alone, MD/CEO procured LPG
cylinders of around 600 Million without following a proper tendering process. PO and FC
assist him in these corrupt deals, to the dismay of employees, Internal Audit department staff
of his own choice endorse all these acts by producing laughable investigation reports. This
Audit department is still unable to locate about 5 company vehicles including a luxury BMW 5
series which were disappeared immediately after the registration. In this instance also,
MD/CEO, FC, PMand the staff of Internal Audit are guilty of orchestrating and executing a
corrupt deal making a loss of few Million to the GOSL.
Non Payment of Custom Duties for un-declared Cargo- Companyhad an accumulated
undeclared stock of over 1,000 M Tons of LPG at the end of 2012 and MD/CEO instructed
finance department to manipulate accounts to cover this stock. As per the country law, he is
bound to declare any excess stocks received to customs as a separate declaration to pay the
applicable duty and other charges. In this instance MD/CEO, FC, PM are guilty of producing
fraudulent Custom declarations and not making correct payments, authorizing and making
irregular financial record and Internal Audit for not conducting proper Internal Audits.
Contempt to Judiciary MD/CEO used his political connections to non-implementation of the
Pricing Formula which was recommended by the Supreme Court and Implemented by the
Consumer Affairs Authority in every Two (2) months. By not complying the courts order
MD/CEO manage to earn a higher profit by exploiting the poor consumers.But MD/CEO
managed to influence CAA to maintain the LPG domestic cylinder price made at a time of
historically highest world market LPG Price. In this instance MD/CEO and FC are guilty of
Contempt of Court.
Treasure Hunting MD/CEO used company employees in Treasure Hunting and in One such
occasion on the 15th January 2012 , Litro employee KithsiriPalansuriya, Company Vehicle
(WPPD 2674) and his team was taken into the Police custody by the Sri Lanka Police,
Wariyapola and was officially informed to the company. However MD/CEO managed to
release his team by using his influence and Department of Archeology worked during the week
end to produce a letter to courts stating the place they were found excavating is not a published
archeological site.The formal inquiry was held on 02 April 2012 by an independent inquiring
officer, a retired President of the Labour Tribunals, F.N. de Silva, Attorney at Law & Solicitor.
The inquiry report of Mr. F.N. de Silva dated 13 April 2012 held Palansuriya guilty of all above
charges leveled against him. Based on the above findingsand the recommendations of the
disciplinary board MD/CEO reluctantly agreed to terminate this employee. MD/CEO was

furious on this and made arrangements to absorb him to a Litro Subsidiary Sino Lanka and
later Litro Human Resourses Director (HRD)reinstated him on the same position after
negotiating a service extension to him after completing his 60th Year. In the first instance
MD/CEO is guilty of using his official capacity for Treasure hunting, which itself is a criminal
act. Secondary MD/CEO and HRD is guilty of abusing their official positions for personal gain
by reinstating a terminated employee through an improper channel.
Foreign Travel- In the 2012 and 2013 MD/CEO orchestrated foreign trips to UK and USA to
meet his Children and wife . All these visits were made on Business and First Class including
super luxury hotel accommodation. In addition to this he made a habit of having a family tour
to a country under the cover of participating to the Annual World LPG Forum. The cost of
Five Start Full Board Suite accommodation and Business/First class travel cost of millions of
rupees were passed to the company and HRD whole heartedly approved those payments in
violating existing policies and in the absence of any board sanction in anticipation of a service
extension. After the return of his family from UK and USA, his business requirements in those
countries came to a sudden stop.In this instance MD/CEO is guilty of abusing company money
and HRD is guilty of lack of intervention by keeping a blind eye for his personal gain.
Telephone Cost of Family- MD/CEO used Litro funds to settle his Wifes IDD call charges
amounting to millions during this period. HR Director, who takes leading role in deducting
employee salary for 10 Rupee excess in Telephone Bill, kept silent and endorsed all these
wrong doings in anticipation of his service extension. In this instance also MD/CEO is guilty of
abusing company money and HRD is guilty of lack of intervention by keeping a blind eye for
his personal gain.
Aston Martin Car KY 0077- It is believed that, MD/CEO imported an Aston Martin car
through his Son, by proving erroneous information to the customs about the vehicle age, Usage
after registration in UK etc and then arranged a Duty concession in obtaining clearing permit
by abusing his political contacts. By doing so, he violated the country law as well as made a
loss of Government Duty and Tax income to the tune of 20 Million. In this instance also,
MD/CEO is guilty of orchestrating and executing a corrupt deal making a loss of over 20
Million to the GOSL.
Responsible Parenting- MD/CEO provided a fully furnished office room to his Son ( A
university drop out) and provided security guards and a backup vehicle ( defender) on company
cost. Considering the office rental cost at the Union Place, this Father and Son utilize an area
over 2,000 Square Feet and 3 parking slots .MD and his Children, use company money for their
lunch. This is being practiced almost every day, where as a company vehicle is shuttling many
times between his home and Office. In stark contrast, MD and the HRD didnt allow to
provide a subsidized meal to the hard working factory staff and doesnt approve a breakfast for
sales staff who leave home before dawn. In this instance also MD/CEO is guilty of abusing
company money and HRD is guilty of lack of intervention by keeping a blind eye for his
personal gain.
Private Staff - MD/CEO employ over 3 personal body guards at Litro and another 4 at the Sri
Lanka Insurance, 2 Drivers and 3 Security guards at his Home.This staff used to accompany
him even to Weddings and in some occasions, were instructed to taste food before he consume.

Some were asked to wear Black uniform similar to PSD and other were asked to wear a
uniform similar to VIP security.In this instance also MD/CEO is guilty of abusing company
money and HRD is guilty of lack of intervention by keeping a blind eye for his personal gain.
Living in Luxury- MD/CEO rented his own House, which was in Nugegoda area and
requested the company to provide a House. It is believed that , he bought this house for 80
Million at No 8, Rodrigo Lane, Nawala . As usual, HR Director came to assist him by arranging
the rental to this Mansion and security, adding a huge burden to the company. A rental was paid
in advance to the tune of 6 Million. Employees find it difficult to understand, how Company
spent 1.6 Million for painting and over Six hundred Thousand rupees to install a lightning
arrestor to a rental property. It is clear that, HRDand FC are key members of this
fraud.Again In this instance MD/CEO is guilty of abusing company money and HRD and FC
are guilty of lack of intervention by keeping a blind eye for their personal gain.
Salary and Allowances- From the inception, MD/CEO received monthly payments exceeding
Millions of rupees, without having any Board Resolution or Finance Ministry approval. Finally
he produced a dubious document, as the Finance Ministry approval. These payments were
made against the Company Act and Again HRD and FC kept mum on all these financial
frauds.In this instance also MD/CEO is guilty of abusing company money and HRD and FC are
guilty of lack of intervention by keeping a blind eye for their personal gain.
Abuse of Vehicles - Any given time MD/CEO uses more than 5 Vehicles for his private use
and he continue to change his vehicle fleet. He has the habit of buying luxury vehicle on annual
basis. Immediately prior to the Presidential election he had a fleet of 7 vehicles as listed below.
1) PE- 7206 Mitsubishi Full Option Double Cab
2)KS- 7742 BMW 5 series 3) KN
4716 Toyota Land Cruiser Prado 4) KY 5208 Land Rover Jeep 5) PV 2565 Land Rover
6) KJ 3866 Mitsubishi Montero 7) KV 6427 Land Rover . ( First 5 vehicles are from Litro
Gas and Last 2 Vehicles are from Sri Lanka Insurance) . These procurements were made
outside the tendering process involving significant commission payments and HRD had
willfully neglected the process resulting heavy losses to the Company while allowing
unlimited usage of Fuel. In this instance also, MD/CEO, HRD, FC, PM are guilty of
orchestrating and executing corrupt deals making a heavy loss of over 10 Million to the
GOSLand the staff of Internal Auditfor not conducting proper Internal Audits.
Erroneous Transfer of 350 Million- MD/CEO and FC transferred 350 Million to the Inland
revenue department on or around the election day, on the instructions of a senior politician. On
this occasion, he threatened the staff of the Finance department, who refused to carry out this
fraudulent transaction.In this instance MD/CEO& FC are Guilty of intimidating law abiding
employees and executing an illegal financial transaction in violating financial regulations.
Maintaining an Elders home Without making a genuine effort to find suitablereplacements,
MD/CEO extend the services of some retired staff in exchange of supporting his corruption.
*HRD - On behalf of this HRD, company absorbs a total cost of over 10 Million/ year,whereas
he had not done any HR development work during his total tenure. During the last two years,
he is operating a private consultancy firm and most of his private work is being done at the
Litro office during office hrs, and to the utter dismay of his staff, he conduct closed door

meetings of his private company, in his office room and in some cases the sessions last more
than half day. * Health and Safety Manager (HSM) An Employee retrenched by the
UniLevers for under-performance and Shell recruited him as an interim substitute until they
find a competent Manager. Litro extend the service of this Manager at an annual maintenance
cost of over 5 Million, where as he has not done any HSE training and company lost its
ranking during the 2014 National Safety Award. Should a company doing a business with LPG
( A high risk substance) continue to maintain a lethargic individual on public money?
*Business DevelopmentManager An elderly employee was recruited to this newly created,
when he was over 60 yrs and this was done to bribe this man to cover up MD/CEOs
inappropriate relationship with his daughter. (Note- A company employee was formally warned
and subsequently threatened for having an affair with this female employee) . It was later
revealed that this elderly employee was discarded by the Sri Lanka Insurance on a policy
decision and he found his retirement home at Litro. HRD supported this knowing there is no
carder vacancy.In this instance MD/CEO &HRD are Guilty of willful negligence in their
professional capacity by not recruiting suitable staff for vacancies and guilty of abusing
company money and HRD is additionally guilty of lack of intervention by keeping a blind eye
for his personal gain.
Foreign trips as Bribes- MD/CEO use Foreign trips as bribes to persuade employees to support
his corrupt deals. Annual Global LPG forum is one such event and so far he has not sent a
single operation or technical staff to these events. In the resent event, which was held in North
America, MD/CEO nominated the 60 year old HSM, who was scheduled to be retired after 3
months. This was arranged in return to his support in approving some substandard LPG
accessories and tanks. Again In this instance MD/CEO is guilty of bribery and abusing
company money and HRD is guilty of lack of intervention by keeping a blind eye for his
personal gain.
Great Wall of Litro- MD/CEO built a unique entrance wall at the Litro Terminal in
Kerawalapitiya and the Piling Job was awarded without tendering to over 5 million. Given the
excuse of pending Presidents visit he managed to silence staff members who questioned the
process and the requirement of this creation.In this instance MD/CEO, FC and PO are guilty of
orchestrating and executing a corrupt deal making a loss to the GOSL.
Soft Heart-MD/CEO amended the company benefit policy to reward a female employee and
again the infamous HR Director became his savior. It is believed that, Sino Lanka has a
rented apartment to provide accommodation to visiting foreign staff for the Hyatt hotel
project for a large sum. Ownership of this apartment is a matter of interest. It is public
knowledge that, this apartment is used to interview somehigh performing female staff, who
received salary increments, Bonus and other perks beyond the company policy.In this instance
MD/CEO and HRD are guilty of obtaining Sexual Gratification for Female employees and
abusing their official capacity
Political Donations and Activities- MD/CEO made donations worth Millions of rupees to
political functions to Mr. Danasiri Amaratunga and various other people. There was no
ratification process and funds were managed according to his own whims. Immediately prior
to the Presidential election, MD had donated 1,000 number of cylinders with accessories to
Mr. Thilanga Sumathipala to distribute free for election propaganda. It is learnt that, some of

the company vehicles were given to various politicians for election related work and it is
reliably learnt that, some of these vehicles were used in illegal activities. One such example is
providing KY 1243 vehicle given to Mr. H.H.Anura Chandrasiri, a lawyer worked at the
Temple trees. This was procured from a known party, without following a proper tender
process. In addition he was paid a monthly fuel allowance of about 200,000 Rupees.In this
instance MD/CEO, FC and HRDare jointlyguilty of involving in politics and abuse of
Company Money. In addition HRD is guilty of not discharging his duties by allowing external
people to use Company assets, which come under his direct supervision.
Anti-competitive practices- MD/CEO openly instructed his distributors to collect competitor
cylinders in numbers and were repainted in the Mabima filling facility. Most of the senior staff
objected to this unethical practice, but he continued this practice and to conduct this practice in
a large scale, a fully equipped repainting facility is being established at Mabima. This
equipment procurement also was done in a very dubious manner through his loyal group of
employees.
Hambantota Tank Farm-In order to satisfy political hierarchy, MD/CEO leased this facility for
an exorbitant cost, without having any business plan. As a result, the company had to spend
over 100 Million rupees by this time for necessary maintenance and modifications. Now Litro
has its staff including security to provide a 24 Hr operation and safety support.
Sino Lanka Money Laundering Office This corrupt MD/CEO has registered numerous
companies as subsidiaries of Litro gas and used to provide employment to his cronies. Few
examples are as follows. * An accountant who worked in the Sri Lanka Insurance as an
Internal Auditor to protect all SLI corruptions was made the GM of Sino Lanka, Which is the
managing company for Spas and Hotels.* Another person was made a consultant amidst his
ongoing legal issues related to infamous Ceylinco financial frauds. MD/CEO would have
considered a residential training program he received in the University of Welikada after
completing Ceylinco Diploma. * Under this company, MD/CEO inflated the cost of Southern
Expressway Rest Area Construction cost from 350 million to 800+ Million, without adhering to
any contract management procedure. * All the procurements for Hotel Projects were done
without tendering , through suppliers of MD/CEO choice.
--------------------------by (2015-02-14 03:04:48)