ISSN: 1391 - 0531
Sunday, May 06, 2007
Vol. 41 - No 49
Financial Times  

Customs investigation into Distilleries Co.

The ongoing investigation into the alleged illegal importation of alcohol by Distilleries Company of Sri Lanka (DCSL) took another turn last week.

After a long drought in shipments of alcohol entering the country, sources at the Customs Department involved in the probe told The Sunday Times FT that Periceyl (Private) Ltd, a jointly controlled entity of DCSL, received a shipment of brandy.

After the shipment arrived, Customs officials took samples from the consignments on April 27 in order to have it analyzed by the Government Analyst, Gamini Somapala. However, officials are alleging a conflict of interest involving Somapala due to his son being a DCSL employee. Customs sources said there is a likelihood that the samples may be sent elsewhere for analysis to avoid any complications. They allege that when samples for testing had been taken in the past and sent to the former Government Analyst, K. Sivarajah, they had been tampered with and blended with ethyl alcohol. Sivarajah is now working as a consultant for DCSL. He couldn’t be reached for comment.

The Customs officers involved in the investigation which was first launched in 2006 say they have documentary proof that shipments of alcohol including brandy, gin and whiskey were sent from De La Tour Caves and Distilleries in France to Periceyl, labeled as ethyl alcohol under a greatly lowered rate of duty. Copies of faxes and correspondence between the two companies were published in The Sunday Times FT last year. The Customs officers are alleging that the government has been denied millions of rupees due to this alleged fraud.

A Customs officer said DCSL was only now starting to legally import alcohol under the proper customs classification unlike in previous years. "Before, they were doing it to avoid higher taxes. Now they are paying because we are coming behind them. Otherwise, they still wouldn't be paying."

The official also said that they are aiming to recover previous dues. For ethyl alcohol imports, the customs duty is Rs.125 per litre. This is in stark contrast to customs duty for alcoholic beverages which is Rs.880 per litre. (NG)

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Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.