A fed up for the street was offered two weeks ago by the house tax authorities to accuse "bond fraud," Arjun Aloysius first accused of helping the fallen financial tycoon run his troubled liquor company W.M. Mendis & Company Ltd and bring their Arrack distillery back into operation.
The agreement with the Excise Agency was that Arjun Aloysius agreed to repay all of the company's excise arrears once permission was granted to resume operations and sell the company's famous "Mendis Special" to his army of patrons.
Aside from billions of dollars in excise duties, the company owes the state billions in unpaid taxes. As announced in the Sunday Times on July 4th, tax investigators have uncovered massive tax losses at the now-defunct liquor giant. The dossier on the W.M. Mendis & Co. Ltd. reveals:
- DEFAULT: Unpaid excise taxes of Rs. 1.1 billion to the excise authority
- DEFAULT: Unpaid corporate income tax of Rs. 2.63 billion
- DEFAULT: unpaid VAT of $ 3.55 billion
Sum of Rs. 7.28 billion in unpaid taxes to the state.
Although excise taxes had pushed for payment and the tax office had even filed a recovery lawsuit, Aloysius argued that after his company's license was suspended for tax loss in 2018, he had no repayment options as the company's revenue stream dried up.
It was the typical Catch 22 situation. And the Aloysius answer, based on the classic paradox, "how can the company repay the debt until the company is allowed to operate and earn the means to repay the debt" proved to be a crucial factor in avoiding the wrong To seal the argument in the eyes of naive excise duties. Seduced by the prospect of getting lost tax billions back into the begging state coffers, the Excise took the bait and restored the suspended license.
A senior excise official told the Sunday Times, “The company pointed out that it was unable to pay the lost taxes because all other sources of income were closed. As such, an agreement has been made that it can resume operations on condition that it makes scheduled payments to the department. "
"Under the agreement, he said," the company owned by central bank bond scammer Arjun Aloysius has agreed to pay off the tax arrears in installments. The company is also required to pay scheduled taxes every 15 days. We see the agreement as the best option to reclaim outstanding tax revenue, the official emphasized. "
But in their rush to collect the chickens before they hatch, had they forgotten to even superficially check the lineage and condition of the hen and her continued ability to deliver broilers with a flock of foxes in the barn?
A simple CRIB check would have shown that W.M. Mendis & Co. Ltd. had not only failed to pay Rs 7.28 billion in state taxes, but also defaulted on loans from state banks and other institutions. The company's loan portfolio shows:
No DEFAULT: Rs. 5 billion loan from Volksbank
No DEFAULT: Rs. 4 billion loan from the Bank of Ceylon
No DEFAULT: Rs. 800 million loan from Volksbank-Leasinggesellschaft and
No DEFAULT: Rs. 2 billion due to various institutions,
Total debt of Rs. 11.8 billion to state banks and others. Together with unpaid taxes of Rs 7.28 billion to the state, the company's total gross liability on July 1, 2021 is rupees. 19.08 billion
W. M. Mendis & Co Ltd. was founded over sixty years ago as a spirits manufacturer with a distillery in Beruwela and a fully automatic bottling plant built in Germany in Welisara. It soon developed into one of the largest liquor companies in Lanka with a product range of 17 types of spirits. This consisted mainly of coconut arrack, old arrack and blended arrack. It also produced brandy, dry gin, lemon gin, vodka, rum, red velvet coconut whiskey, and coffee liqueur.
But its flagship was the & # 39; Mendis Special & # 39 ;, the company's first product in 1960, which the company boasted, distilled in a French-made pot still and aged in barrels and vats for at least three years Oak matured wood. The company's blurb also claimed that the "Mendis Special" was the best Arrack in the world.
Ten years ago in June, Arjun Aloysius acquired a controlling stake in the liquor company for over 1 billion rupees, according to a June 13, 2011 report by the Daily FT. The report had industry analysts who welcomed the young Aloysius acquisition, stating that & # 39; Given the new focus, momentum and strategic inputs, more consumers are likely to welcome the Mendis brand. ”Unfortunately, as the $ 19 billion debt hangover now shows, under Aloysius' mismanagement, the company with over fifty years of history behind it has been razed to the ground which led to its closure in 2018 for non-compliance with its taxes.
Worse still, the new owner's legitimacy was irretrievably caught in a financial scandal when Arjun Aloysius, along with his father-in-law, then Central Bank Governor Arjuna Mahendren, was named the prime suspect of Central Bank bond fraud, which has been dubbed the bank robbery of the century , rang the death bell of the Yahapalana government.
Arjun Aloysius is currently on bail awaiting trial, while his father-in-law, Singaporean national Mahendren, whom both the previous and current governments have vowed to extradite him to face justice in Lanka, lives and does so in style from its Singaporean isolation, the government mockingly & # 39; catch me if you can & # 39 ;.
It is astonishing that in their eagerness to reclaim their unpaid billions of dollars, the excise authority rushed to grant the Aloysius company the suspended license to resume production on the naive assumption that the company would sell its drink and pay its excise taxes could and could brag its one billion dollar debt in installments and happily in business.
What made them rush headlong to this decision without interruption, without considering the bankrupt assets of the disused distillery as a whole, threw the chorus of creditors lined up in the dark sides – the financial administration, state banks, and other institutions – on it waiting, knocking on the distillery door and not screaming for a Mendis Special, but for his own owed drink from the empty barrel?
The shortsighted kiss of life given to a comatose corporation with love by the nation's excise tax burdened by its incredible Rs. 19 billion debt was pragmatic enough to lift its head above the water mark and increase its revenues and profits to repay total sums owed, especially in a market where its Mendis Special has to compete with other giant liquor brands? Not to mention that the legal liquor industry's own share is shrinking due to exorbitant excise taxes in the face of increasing trade in cheaper hoochs?
And to top it off, it's not incredible that the tax authority should have neglected the political aspect involved in giving a welcome life to a liquor company owned by a publicly disgraced financial speculator whose proven track record is , Giving a Welcome Life, accused in court of masterminding the central bank's multi-billion dollar loan fraud?
In addition, WM Mendis & Co, of which Aloysius is chairman, owes the tax office Rs. 2.63 billion in unpaid taxes, but even after three years the helmsman has not considered it appropriate to lift the corporate veil and its chairman and largest shareholder To hold Arjun Aloysius personally accountable for the insolvency and to be content with merely filing a civil action civil for recovery from the company.
Lesser mortals have been jailed for evading taxes to be paid to the Inland Revenue Department for lesser amounts, but by some mysterious force that appears to direct the affairs of men and mice, the bond scam appears to Aloysius, chairman of WM Mendis & Co having been granted special exemption from law enforcement and jail for tax evasion and allowed to roam free. Instead, he has been rewarded with the bespoke providential blessing of being thrown off the lifeline with the issuance of the indispensable excise license to rescue his drowning distillery when hopes of resuscitating the comatose are all but fled.
So who was holding the political dynamite that nearly blew up the government? Was it the excise duty commissioner who has so far been silent about who the dubious credit belongs to? Or should the toast of the drinkers be raised to the higher ranks of ministerial power?
All that leaked out of the excise department on Friday July 2nd was its spokesman Kapila Kumarasinghe, who told the media, "Permission has been given to resume operations under strict conditions." But there was no buzz of who it was Gave permission.
As it turned out, however, sober advice prevailed and quickly recovered from the high. Three days later, on Monday, July 5, the cabinet overturned Friday's decision to license Aloysius.
Co-Cabinet Spokesman Minister Ramesh Pathirana said the cabinet had decided to suspend the WM Mendis Company's license to prevent funds earned through improper funds from entering the state coffers. He said businessman Aloysius was responsible for massive financial fraud and ministers had warned that the money earned through fraudulent means was being used by Aloysius to pay his fees.
"The Cabinet of Ministers, said Pathirana," was of the opinion that Aloysius should not be allowed to use such funds to legitimize his other businesses and then continue to earn money. The license was not suspended on a proposal to the cabinet, but on the instructions of the cabinet to the Ministry of Finance,
The next day, Marikkar from SJB told parliament: "He should have been behind bars for fraudulent government bonds, but instead the government tried to return his license," Marikkar's observation likely summed up the entire fiasco.
Oh, for Arjun Aloysius. The stench of shame refuses to leave, even if Providence is forgiven, but holds fast to his mortal robe that it refuses to give you the Golden Fleece at the critical hour before your arrival.
And after uncorking his vintage fizzy drink during his festival weekend to see his distant star emit a flare of hope of revival, how disappointed his hopes must have been when he realized how many who had one too much for the street ? Long since fathomed: there is a lot of slippage between drink and lip.
|Sheer police show
This is the horrific photo published in the Sunday Times last week that embodies the quintessential police brutality in action that has been condemned by the public across the country, including the President's nephew and Prime Minister's son, Cabinet Minister Namal Rajapaksa.
The shocking photo, taken by Sunday Times photographer Eshan Fernando, shows an elderly lady still clutching her purse and being forcibly carried to the waiting police bus as she attends a peaceful protest near Parliament's roundabout.
The 72-year-old protester, who was among 33 people calling for the abolition of the controversial plan to establish a medical school at Kotelawela Defense University on July 8 in Sri Jayewardenepura, was later released on bail.
However, some weren't so lucky. After the magistrate released them on bail, some – including the Secretary General of the Ceylon Teachers ’Union, Joseph Stalin and Ven. Rathkarawwe Jinarathana Thera of the Inter-University Student Association – were forcibly taken to quarantine centers, where they were held until Friday.
The police claimed at the time – as did Police Minister Sarath Weerasekera on television that Friday evening – that they had responded to the instructions from the Director General of Health Services.
They cited the instruction from him to the IGP, which police relayed to the media on July 6, saying that there was a serious risk of the spread of the COVID infection if large numbers of people gathered or protests were held. Therefore, such large gatherings and staging of protests should not take place until further notice. The media release also stated that the police will act according to the quarantine policy.
The first question on this directive is whether a quarantine law would empower the Director General of Health to specifically prohibit the staging of protests under the guise of COVID? He has every right to prohibit gatherings, but in his directive to combat protests with a taste of political orientation, and is exceeding his mandate as the nation's COVID tsar.
The second question is whether the police went beyond their duty in forcibly wrapping those who had just been released into quarantine camps by the magistrate. Have you mistaken quarantine as a punishment for protest instead of recognizing the real purpose of quarantine?
As the Sunday Times reported last Sunday, the PHIs union president Upul Rohana said the PHIs are not recommending that the region quarantine protesters. He said, “Neither the District Health Doctor nor the PHI can recommend that protesters be quarantined in this way. There are strict guidelines as to who can be quarantined and for what reasons.
Since the condemnation of such dire behavior last week, the good news has been that the police seem to have mended their wayward ways and since then have shown marked restraint. Hopefully such a reformation will survive the pandemic and become a lasting virtue beyond COVID.