Harsha slams EPF Annual Report 2012 in Parliament
UNP MP Dr. Harsha de Silva on Thursday claimed that the Employees Provident Fund (EPF) Annual Report for 2012 was nothing more than an extension of the ‘Mahinda Chinthana’ political propaganda.
De Silva charged that the “tone” of the report set the stage for forthcoming elections and accused the Central Bank Governor of being “unprofessional”.
“Rather than talking about 2012, the Governor is accusing lawmakers of attacking the EPF. He is referring to the series of revelations I made in Parliament to bring their malpractices and massive fraud into the limelight,” Dr. De Silva said, following the tabling of the EPF 2012 Annual Report in Parliament yesterday.
Dr. De Silva went on to say: “The Governor is making a political statement, which is an attempt to cover up the massive frauds of pump and dump which took place in 2010.
The audit examinations of the 2010 accounts are yet to be completed in Parliament. Extensions are given one after the other to avoid being exposed. This is a clear violation of Article 148 of the Constitution.”
However, commending the bold steps taken by the Auditor General, Dr. De Silva said: “The observations given by the Auditor General clearly reveal certain questionable activities which took place and a lack of documentation.”
In the Annual Report the Auditor General has made two observations. The first of these observations refers to section 34 of the Sri Lanka Accounting Standard 16, where fixed assets should be revealed at least once every three or five years. Nevertheless, the fixed assets of the EPF, costing Rs. 76.6 million, which had been fully depreciated, had not been re-valued.
According to the second observation, despite mentioning that an impairment test in terms of Section 58 of the Sri Lanka Accounting Standard 39 had been done to ascertain whether investments made in companies in which financial assets had been classified and brought to account as investments were subjected to impairment during year the under review, adequate evidence in that had not been furnished to audit.
Nevertheless, an impairment test had been done at the end of 2013. The yardstick applied in that connection had been a 20% decrease in the share market price. According to the test done based on this policy, the share market value of the investments made in the shares of two companies (a sample taken by the Auditor General) as at 31 December 2012 amounted to Rs. 189.9 million and Rs. 6.79 million respectively and as compared with the cost of those amounting to Rs. 1 billion and Rs. 43 million the impairment in the value amounted to Rs. 815 million and Rs. 37 million or 18.9% and 15.5% respectively, the Auditor General stated in his report.
However, the 2013 Annual Report claims that the EPF is the largest superannuation fund in the country with a net worth of over Rs. 1.1 trillion as at 31 December 2012, accounting for 12.7% of total assets in the overall financial sector in the country.
Governor of the Central Bank of Sri Lanka and the Chairman of the Monetary Board Ajith Nivard Cabraal, addressing shareholders, reported 2.3 million members and 14.6 million accounts in the year under review.
“During the five-year period from 2009 to 2013, the EPF earned a massive profit of Rs. 558 b, which easily superseded the earnings of any other entity with a comparable asset base. In absolute terms, the EPF made a profit of Rs. 101.7 b in 2009. Rs. 111.5 b in 2010, Rs. 107.5 b in 2011, Rs. 111.8 b in 2012, and Rs. 125.6 b in the year ended 2013, and such profits were duly credited to all member accounts at the end of each respective year,” Cabraal said.