Rs. 25 m fraud at Ceylon Leather tannery

Monday, 11 May 2015 11:55 - - {{hitsCtrl.values.hits}}

Complaint lodged at CID, investigations ongoing

Ceylon Leather Products Plc (DI) last week announced the detection of financial fraud amounting to Rs. 25 million at its Tannery in Mattakkuliya, relating to off speck leather and scrap material sales during the financial period from 2012-2014.

In a filing at the CSE, the company’s Managing Director and CEO Sitendra Senaratne said subsequent to the suspicion raised, an inquiry was initiated and appropriate actions were taken against the employees who were responsible. An independent firm of chartered accountants was appointed to investigate and quantify the loss and recommend further steps to prevent such fraudulent activities in the future.

DI said as per the investigations, the loss during the 2012 to 2014 financial years amounted to Rs. 24.9 million. Further to the findings, the company has lodged a complaint with the Criminal Investigation Department appertain to this matter and investigations are currently progressing. The management has also taken immediate steps to strengthen controls within the company with the assistance of the independent firm of chartered accountants.

Through the filing, the DI Board of Directors has assured shareholders it will vigorously pursue action against all those responsible.

In FY2013/13, DI’s consolidated after-tax profit was Rs. 120 million as against Rs. 101 million in FY13, Rs. 41 million in FY12 and Rs. 107 million in FY11. Its external auditor is Ernst & Young.