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The Committee on Public Enterprises (COPE) has raised serious concerns over ownership changes, conflicts of interest, and lack of Government audit at LTL Holdings, a key company partly owned by the Ceylon Electricity Board (CEB), following a detailed inquiry held on 24 October under the Chairmanship of MP Dr. Nishantha Samaraweera.
As an extension of its ongoing probe into the CEB, the COPE summoned LTL Holdings and its subsidiaries to clarify issues surrounding the company’s ownership structure, governance, and auditing practices.
Officials from LTL Holdings explained that the company originated in 1980 as Lanka Transformers Ltd., a public-private partnership formed to manufacture and maintain transformers needed for the national power grid. The CEB initially held 70% of the shares, with the remaining 30% owned by a Scottish partner. In 1986, the Scottish company sold its stake to a Norwegian entity, which later exited in 2005.
Over the years, LTL expanded its portfolio, establishing subsidiaries such as LTL Galvanising, LTL Steel Fabrication, and Lakdanavi Ltd., which supplies electricity to the national grid. In 2008, the company rebranded as LTL Holdings, with its subsidiaries operating as separate entities.
During the proceedings, the COPE questioned the current CEO, who is a former CEB engineer, on his transition from the CEB to LTL, but he failed to provide exact dates. The Committee expressed strong displeasure and demanded immediate submission of this information, noting potential conflicts of interest since both the Founder and current CEO are former CEB officials. Lawmakers highlighted allegations that such overlaps may have influenced decisions on electricity procurement and renewable energy integration.
The COPE also examined the creation of a 10% employee trust in 2001, which reduced the CEB’s stake to 63%. It was revealed that this trust was later converted into Tepro Investments Ltd., in 2017, and despite dividend payments amounting to Rs. 9 million being made to certain partners, CEB employees had allegedly not received their due shares. LTL officials denied wrongdoing but were instructed to submit a full report.
Another key revelation was that after the Norwegian partner’s exit in 2005, the CEB declined to buy the available shares, leading to the formation of LTL ESOT to acquire them through a loan. That entity was later renamed Peradiv Ltd., in 2018.
Further, in 2006, LTL established West Coast Power Ltd., to operate the Yugadanavi Power Plant. It was disclosed that the CEB owed Rs. 79.4 billion to West Coast for electricity purchases. To offset Rs. 26 billion of this debt, 28% of LTL shares previously owned by the CEB were transferred to West Coast under Cabinet approval. Consequently, the CEB’s ownership in LTL dropped to 35%, from its original 70%.
The current shareholding of LTL Holdings now stands at: 35% – CEB, 28% – West Coast Power,
27% – Peradiv Ltd., and 10% – Tepro Investments.
COPE members noted that this dilution of State ownership from 70% to 35% occurred through a complex and opaque process that warrants further scrutiny.
The Committee also voiced alarm over LTL’s refusal to undergo a Government audit. Despite multiple attempts since 2015, the Auditor General’s Department has been denied access. The COPE reaffirmed that a company established with public funds cannot evade State audit oversight and instructed the Power Ministry Secretary and the Auditor General to initiate immediate measures to enforce an audit.
The session concluded with the COPE reiterating its commitment to ensure accountability and transparency in entities connected to the CEB, particularly those handling public assets and essential infrastructure.
