How Arumugan Thondaman Milked Milco

 Tuesday, 09 June 2015

Laska.asia unearthed the startling revelation on how Arumugan Thondaman, a man of no singnificance and little importance managed to take Milco with 900 million in cash reserves to a bankrupt company with over a billion in debt when he left.

Why he was protected and nurtured by the former regime is unsure but we are sure about the following :)
If you ever wondered how….

The former Minister buys a Lavish House for over 100 million at # 135 Kumbukduwa maw, Parliament road, with a gov. salary of less than 100,000rs a month

Naushard, the former working director of Milco starts Travel company and Buys land In Kalpitiya and now lives in Australia

Sunil (chairman) invests in Asian Alliance and gets Director post while building a Lavish House in Kandy, and now living in a lavish apartment in Colombo 07

The Scam :
The Purchase of UHT Machines
Alleged Missaporation ;
over 500 million Rs

The Players ;
1.former Minister of Livestock – Arumugam Thondaman
2.The Chairman Milco – Sunil Wickremasinghe (0777352415)
3.Working Director Milco …. Naushard Junaid (0777707000), (0717707000)
4.Thondi’s Secretary – Cader
5.Industrial Stainless Steel Fabrication (Pvt) Ltd (ISF)- 3/4 Rockwood place, Colombo 7
** A company “BLACK LISTED” by MILCO in 2006**
6. Chariman – N. Sivakumaran, Director Anjula Sivakumar & CEO of ISF, mr. Ravitharan (tel # 077-2078455)

The Game;

A tender was called on the 19th of November 2010 for the purchase of 2 UHT plants (MLRCD/2010-01) (proof 1) to increase the production and to diversify into the UHT market! That the excuse but here’s the scam…
Industrial Stainless Steel Fabrication (pvt) ltd, of ¾ Rockwood Place, Colombo 7 (good luck if you could find that office) was awarded the contract ….. (proof 2) although they were 4,000,000 US dollars more than the other bidders!!! (proof 3) That a cool 450,000,000rs more!!!

For example ISF quoted 4,280,000 Euro cif and an additional 11,200,000rs as local charges (proof 2) while another bidder offered the similar product for 1,950,600 usd with 1,980,000rs as local charges!!(proof 3)
long before the Tender was called it is common knowledge that the chairman of ISF N. Sivakumaran and Arumugan Thondaman were very close friends as N. Sivakumar is based in Chennai in whose house the former minister frequently stays.

The Crime

1.The Tender was awarded to ISF which was Blacklisted and taken to Courts by Milco in 2006 for supplying a yogurt making machine when they ordered a ICE cream making machine!!!! Causing a loss of 100,000,000rs!!!!!

2.Using the Tax payers money to purchase machinery at three times the market price and worst of all using Milco reserves as collateral to finance the purchase

3. In this case two tenders were called … one for product and another for Price

4.this effectively prevented the cabinet approved committee finding out the 450 million price difference for both machines

5. The catch …, ISF gave MILCO the specification required for the tender !! :) so no other supplier had a fair shot

6. The former Chairman played his role to support Thondi by bringing in retired ex-Nestle staff members (2 in total) and 2 of his planter friends as directors of Milco, one of them called Mr. Yapa was the most important member in the technical committee….!

The machines have been imported from Europe (Finland) but the L/C was opened to India!…why?

why was a L/c Opened to India when Machines are coming from Finland?? Simple…. because Europe will never give Commissions over 5% , to overcome this they had to open another L/C from a ISF account in India, also ISF has Charged an additional 11 million in rupees for local fabrication and installation charges which is their part of the deal, so there was no reason for Milco to open the L/C to India when the Supplier is actually in FINLAND!!! The machines arrived on the 26th of July 2011 to the Pollanaruwa factory and two weeks later another for the digana factory

Ironically the biggest Crime is not the Crazy markup, but the simple fact that the machines are useless!!

we have gone around looking for these UHT milk pouches and still couldn’t find any, maybe there are small quantities somewhere, but what a waste of public funds

The National Milk Board which was formed government agency involved in dairy development, milk collection, milk processing and marketing since 1956 to 1986. In 1986, it was converted into Milk Industries of Lanka Co. Limited under the World Bank project. All properties and functions of N M B were transferred to Milco. Milco is a public company therefor its the Tax payers money these people messed with.

http://laska.asia/featured/expose-how-arumugan-thondaman-milked-milco/