COPE recommends legal action to reclaim SLIIT over unlawful privatisation

• Committee on Public Enterprises says 2015 property transfer deemed irregular, with Rs. 408 m paid by SLIIT back to Mahapola Fund questioned
• COPE Chair Dr. Nishantha Samaraweera urges penalties for those responsible and safeguards against future fraud
• Trade Minister Wasantha Samarasinghe pledges further investigation, says wrongdoing will not be ignored
• Former official claims SLIIT removed from State oversight due to financial motives
• Committee insists SLIIT continue operations, but under Mahapola administration for affordability
• Highlights lack of internal audit staff and inefficiencies in Mahapola Trust Fund
• Calls for commercial audits of Mahapola-linked entities, including loss-making NatWealth subsidiaries
• Scholarship expansion discussed, with Rs. 20 b Fund capital under review for better use
• COPE probes Rs. 750 m loss from failed online lottery deal and contractual hiring practices

The Committee on Public Enterprises (COPE) has recommended that legal steps be taken to take over the Sri Lanka Institute of Information Technology (SLIIT), which previously belonged to the Mahapola Trust Fund as an institution administered by the Mahapola Trust Fund, citing its transformation into a fully private entity was carried out unlawfully.

During a recent Committee session, the COPE highlighted serious procedural and legal lapses in the 2015 transfer, which it says undermined State oversight of a once-public higher education asset. 



It also raised concerns over broader governance issues within the Mahapola Trust Fund, including financial mismanagement, vacant key posts, and the need to expand scholarship access to deserving students. 

Accordingly, COPE Chair Dr. Nishantha Samaraweera made this recommendation to Trade, Commerce, Food Security and Cooperative Development Ministry Secretary K.A. Vimalenthirarajah and Mahapola Trust Fund Chairperson former Justice Vijith Malalgoda.

This recommendation was made during a COPE meeting held last week (9), when the Lalith Athulathmudali Mahapola Higher Education Scholarship Trust Fund was summoned before the Committee to examine the Auditor General’s reports for the years 2022 and 2023 and its current performance.

During the meeting, it was extensively discussed that the property transfer, based on a Cabinet decision in 2015 and carried out with the consent of the Minister at the time, was unlawful. It was also noted that the SLIIT had paid Rs. 408 million to the Mahapola Trust Fund in this regard, and several MPs pointed out that it is concerning for an institution originally owned by the Fund to pay such an amount back to the Fund to gain ownership.

The COPE Chair emphasised that those responsible should be duly penalised and that such unlawful and fraudulent actions must be prevented from recurring in the future.

Trade, Commerce, Food Security and Cooperative Development Minister Wasantha Samarasinghe, who is a Founder Trustee of the Fund, stated that such fraud will not be allowed to fade into obscurity over time, and assured that further investigations will be conducted accordingly.

A former official who opposed the transfer of ownership at the time informed the Committee that the institution, which had begun as a State entity with official representatives on the Board of Directors, was later illegally removed from State oversight due to greed stemming from the realisation that it had become a hub of substantial financial movement.

It was also discussed that some parties might attempt to foster a misconception that these investigations could cause the collapse of a university attended by a large number of students. Therefore, the Committee emphasised that while the SLIIT should continue its current operations, its administration should be returned to the Mahapola Trust Fund. This would, in turn, enable a greater number of students to pursue degree programs at a more affordable cost.

Attention was also drawn to the previous Government’s failure to properly fill key internal roles in the Fund, including the Internal Auditor position. The COPE highlighted that having an inadequately staffed workforce in an institution that handles such a large amount of funds raises serious concerns about its efficiency.

Discussions also covered the current status of companies administered by the Mahapola Trust Fund, including the National Wealth Corporation Ltd., and its subsidiary NatWealth Securities Ltd., both of which have been incurring losses. As such, the Committee decided that a Commercial Audit should be conducted and appropriate next steps taken.

Further, attention was drawn to the potential to expand Mahapola Scholarships to a greater number of students eligible for university admission. The Chairperson of the Fund stated that efforts are being made to achieve maximum equity in the use of interest and other income generated from the current capital of approximately Rs. 20 billion.

In addition, the Committee discussed issues including the appointment of Trade Exhibition Officers on a contractual basis for a two-year term in 2023, and a loss of Rs. 750 million to the Fund due to the withdrawal of the selected Online Lottery Operator. The Committee directed that these matters also be subjected to a Commercial Audit and that necessary actions be taken accordingly.

The COPE meeting was attended by MPs including Attorney-at-Law Dayasiri Jayasekara, S.M. Marikkar, Attorney-at-Law Nilanthi Kottahachchi, Samanmalee Gunasinghe, Jagath Manuwarna, Ruwan Mapalagama, Asitha Niroshana Egoda Vithana, Thilina Samarakoon, Chandima Hettiarachchi, Attorney-at-Law Lakmali Hemachandra, and Dinesh Hemanta.

Also in attendance were Trade, Commerce, Food Security and Cooperative Development Ministry former Secretary P.M.B. Athapaththu and Education, Higher Education and Vocational Training Ministry Secretary Nalaka Kaluwewe, along with several other officials.