CoPE uncovers NGJA’s Rs. 250 m gem scam

• Exposes gem and jewellery regulator’s misconduct with a mere Rs. 10,000 fine, despite licence holder found guilty 165 times over 3-year period for violating export regulations
• Gems released contradicting law, conflicting accounts on Board approval
• Alarm over the timing and intent of the move as it occurred a day before the Presidential election
• Raises concerns over possible influence from ‘invisible hands’ to ignore legal and procedural norms 
• Cope demands detailed report from NGJA official within one month

 A damning investigation by the Committee on Public Enterprises (CoPE) has exposed that the National Gem and Jewellery Authority (NGJA) facilitated the release of a gem parcel worth Rs. 250 million with a mere Rs. 10,000 fine, despite the licence holder being found guilty of violating export regulations 165 times over a three-year period.

The Committee chaired by Dr. Nishantha Samaraweera revealed serious financial irregularities within the NGJA, raising concerns over mismanagement and potential corruption within the institution tasked with regulating the country’s lucrative gemstone industry.

It was also disclosed that the facilitation directly contradicted a ruling by the Fort Magistrate’s Court, which had directed the NGJA to take measures in accordance with its 1993 Act when handling such violations.

The controversy revolves around a consignment of 21,096 carats of precious gemstones including; blue sapphire, star sapphire, and padparadscha sapphire—exported by a company named Elegant Gems, which holds an ‘unlimited licence.’ Initially valued at $ 70,817 (Rs. 250 million at the time), was allegedly underreported its value to just Rs. 20 million, triggering an internal investigation. 

Following this discovery, the NGJA’s Director Valuer has initiated an inquiry where it was later increased to Rs. 150 million and the matter was handed over to the Criminal Investigation Department (CID). However, the CID investigations informed the Court that no criminal offense had taken place. Subsequently, the Fort Magistrate Court ruled on 18 September 2024, that the gem parcel should be returned to the NGJA, directing the Authority to proceed with necessary actions as per its Act.

The CoPE uncovered that after the said parcel was returned to the Authority, the said parcel only had around 19,600 carats of gems. 

It was also disclosed that instead of imposing a maximum fine of Rs. 3.3 million, which was well within the NGJA’s power, the gem parcel was released to the same licence holder on 26 September, with the minimum penalty of Rs. 10,000 —raising questions about undue influence and procedural violations.

The CoPE inquiry also exposed inconsistencies in how the decision was made, with conflicting accounts from NGJA officials regarding whether Board approval was obtained. The Director Export Services and Sales, claimed that approval was granted, while a Board Member refuted this, asserting that the last Board meeting had taken place in August 2024 and the next one only held on 6 January 2025.

Adding to the uncertainty, the newly appointed Legal Officer stated that no official meeting minutes existed to confirm Board approval for releasing the gem parcel on 20 September 2024. The said officer also disclosed that former NGJA Chairman Viraj De Silva had signed the Board paper on 25 September through its Director-General Janaka Udayakumara – ultimately facilitating the release of the gems the next day (26 September 2024). The Board paper was presented by former NGJA Legal Officer Chamika Herath on 20 September 2024.

Notably, all these last-minute decisions were made just one day before the Presidential election, raising further concerns about the timing and intent behind the release of Rs. 250 million worth gemstones.

Referring to the sequence of events, CoPE member MPs pointed out that 20 September 2024 seems to have been one of the most busiest and most efficient days in the history of State organisations, recalling that similar events were uncovered at the National Youth Council where they also worked from 3-11 p.m. on 20 September and issued cheques worth Rs. 100 million.

Dr. Samaraweera opined that these findings indicate serious procedural violations with the decision seemingly made without formal approval of the Board, contradicting established governance norms.

Further compounding the issue, CoPE questions whether the NGJA sought legal advice from the Attorney General’s (AG) Department before releasing the gems and the Authority officials admitted that they only referred the matter to the AG’s office after the gems were already released, citing pressure from the Elegant Gems’ lawyers.

During the hearing, the NGJA Director Export Services and Sales noted that such an incident was unprecedented in the history of the Authority.

The Committee Chair and its members raised serious concerns over the existence of an ‘invisible force’ that may have influenced the decision, overriding a Court order and allowing millions worth gemstones to be released with a negligible fine.

CoPE member MPs further pointed out that despite the licence holder’s 165 previous violations, no serious action was taken, raising suspicions about the collusion within the NGJA’s top ranks.

Dr. Samaraweera issued a one-month deadline for NGJA officials to submit a detailed report on the matter to CoPE, asserting the need for greater accountability.

The controversy also draws attention to the role of policymakers in the matter. The officials revealed that the subject Minister at the time overseeing NGJA was Dr. Ramesh Pathirana with State Minister Chamara Sampath Dassanayake.