Lanka Milk Foods (LMF) this week clarified reports that it has floated a joint venture firm with India’s Tunip Agro to manufacture and export fruit juices, and was planning an IPO but the new company has already run into trouble with Customs over sample shipments.
“A company has been formed under the name Indo Lanka Exports (Pvt) Ltd. No shares have been issued and no capital has been subscribed. A few trial shipments have been made (by the company) to test the market in India,” the Harry Jayawardena-controlled LMF said in a statement to the Colombo Stock Exchange after local newspapers ran the story which first appeared in Indian media.
In another development however, this firm – an LMF subsidiary - appears to have encountered some issues with Sri Lankan Customs even before it started business.
The Business Times learns that a Customs investigation is being carried out with regard to six containers of fruit and pulp concentrate which was imported by Indo Lanka. “The Special Investigation Unit of Customs detained it on July 13 with regard to a Customs duty issue and released it on Wednesday (July 21) under Rs 21 million security, while the investigation is still on. We’ve referred this case to the Government Analyst and the relevant authorities,” a Customs source told the Business Times.
Companies in which Mr Jayawardene has a majority stake and runs it with an iron hand have often run foul of the Customs. The most recent case was Periceyl, a importer of spirits, which figured in a long probe over irregularities in duty payments.