The billboard showing the existence of Pintanna Plantations Pvt Ltd; an institute that has stirred much controversy

Central Bank of Sri Lanka (CBSL) has launched investigations into multiple complaints it has received regarding the collection of cash deposits for plantation investment projects. Recently, the Central Bank disclosed that it has obtained information about institutions accepting deposits from the public primarily for agricultural investments.

CBSL also named Pintanna Plantations Pvt Ltd, owned by Kumar Dharmasena- a former Sri Lankan national cricketer and also an international cricket umpire- to be one of the entities under scrutiny. Central Bank Assistant Governor K.G.P Sirikumara said that contravening Central Bank’s prescribed rates and accepting public deposits constitutes a criminal offence. Only institutions authorised by CBSL are legally permitted to accept such deposits. Sirikumara added that banking institutions may accept deposits under the Banking Act and financial institutions under the Finance Business Act, but affirmed that other entities are prohibited from doing so.

Meanwhile, Sanjaya Mahawatta, Chairman of the organization “Magen Ratata” and Lasitha Lakmal have submitted a written complaint to the Central Bank Governor urging a formal investigation into the acceptance of deposits on behalf of Pintanna Plantations’ cultivation project and the subsequent disclosure to the public. CBSL has responded to this complaint by sending a letter acknowledging the complaint filed by Mahawatta.

In the letter issued by CBSL under My No 24/08/002/0388/001 dated 06.05.2024, it states: “We hereby inform you that Pintanna Plantations Pvt Ltd is not authorised under the Banking Act No. 30 of 1988 or the Finance Business Act No. 42 of 2011 to engage in finance businesses by taking deposits from the public, nor under the Microfinance Act No. 6 of 2016 to engage in microfinance activities. Additionally, it is not licensed under the Finance Leasing Act No. 56 of 2000 to engage in leasing businesses, nor is it licensed by the Central Bank of Sri Lanka, nor is it exempted from the provisions of the said Acts. Accordingly, the said institution is not an institution subject to the regulation or investigation of the Central Bank of Sri Lanka.”

A representative of the company has provided guidance on investing in the agarwood plantation project through Pintanna Plantations Pvt Ltd. This company is registered under the Companies Act No. 07 of 2007 bearing registration number PV 00223817. In 2020, the company received 37.169 million rupees from the World Bank with assistance from the Government of Sri Lanka to initiate the agarwood production process by constructing a factory for agarwood products. Currently, Kumar Dharmasena serves as the chairman of the company, with other members of his family serving as the board of directors.

According to the representative, Pintanna Plantations Pvt Ltd was established in 2009, and 400 agarwood plants can be cultivated per acre. Each agarwood plant can be harvested for use in the production process after 8-10 years. As at the end of the accounting year on March 31, 2023, the company had 110,000 agarwood saplings and trees that were planted. It employs 500 individuals and possesses assets valued at 8.5 billion rupees. As of the same date, the company had 4,000 investors; a number that has since increased to 6,000. Despite having 110,000 agarwood trees, only 15,000 of those aged 8-10 years are suitable for cutting. These trees are situated in the Mawanella, Parakaduwa and Dehiowita Estates. The remaining trees are either saplings or have been in existence for less than 8 years.

Given that agarwood cultivation began in 2009, there should be trees that have been in existence for 10 years by 2019. However, there were only 110,000 trees by 2023. If it is possible to plant 400 trees per acre, the company has only planted agarwood on 275 acres. 

Additionally, according to the company’s representative, there is a five-acre agarwood nursery in Ayagama Estate in Ratnapura and agarwood has been cultivated in 1500 acres. Currently, there is only space for agarwood cultivation in Madolsima Estate in Kandy-which property is owned by the company- as agarwood has been planted in all other plantations.

Assuming that all 1500 acres are planted with agarwood, this would equate to 600,000 agarwood trees; producing a planting rate of 400 saplings per acre. According to the company representative, this institute has a total of 610,000 trees along with the 500,000 agarwood saplings in the sapling nurseries and the existing or newly planted 110,000 agarwood trees. This raises the concern whether Pintanna Plantations Pvt. Ltd. possesses the mature agarwood plants they claim are available for investors. If the ownership of an agarwood tree is transfered to an investor for Rs 40,000 and given that the 610,000 agarwood tress have been sold to investers it can be assumed that Pintanna Plantation earned an income of Rs 24,400,000,000.  

According to the company representative, the company recently paid 380 million rupees as benefits with 100,000 rupees per tree on behalf of its 60 investors for 3,800 agarwood trees planted after 2009; trees which are now 8-10 years old. The company will have to gradually pay benefits to the next investors commencing next year. Pintanna Plantations Pvt Ltd initially had an 8-year agarwood plantation plan, but after establishing the factory, they shifted to a 12-year cultivation plan. This extended plan aims to produce agarwood tea from the leaf buds and leaves harvested from the agarwood plants within three years. Under this 12-year plan- starting from 2021- the investors involved with the tea project are supposed to be paid a maximum of 75,000 to 60,000 rupees per tree over a three-year period. The company’s representative claims that agarwood tea is already available in the market. However, according to our investigation, Pintanna Agarwood tea is not found in the local or global market. In response to our inquiries, the representative stated that Agarwood tea products will be released to the market soon.

The benefits from the three-year plan for agarwood tea products, starting from 2021, will be paid to investors from next year. Additionally, the company began manufacturing products from agarwood in 2021. These products include perfumes, wood oil and chips. The company’s representative confirmed that the factory has 150 boilers for the purpose of producing wood oil. Each boiler requires 50 kilos of agarwood, and after processing for about 10 days, only 75 millilitres of oil is produced. The representative also confirmed that only 500-1000 grams of wood chips can be obtained from one tree.

It cannot be precisely stated how much oil can be extracted from one agarwood tree as it depends on the black part of the tree. According to our findings, one boiler requires 30 kilos of agarwood for a period of 8-10 days to produce only 20 grams of oil. However, the company’s representative provided different figures. According to the details given by them, 50 kilos of agarwood are needed to produce oil in one boiler. The black part of an agarwood tree- which is suitable for oil extraction- weighs between 2-3 kg; sometimes weighing 4-5 kg. Therefore, if 50 kilos are needed to operate one boiler, as the Pintanna Plantation representative claims, the black parts from 10 trees are required. For all 150 boilers, approximately 1500 agarwood trees are needed for an 8-10 day period. If a boiler is operated thrice a month, 4500 trees are required. If the machines are operated twice a month, 3000 trees are needed. Assuming oil production has been continuing since 2021, over three years, 162,000 trees would be needed at 4500 trees for a month, or 108,000 trees at 3000 trees for a month.

Based on the data provided by the representative, the number of agarwood trees they claim to have is uncertain. According to their accounting statement- dated 2023-03-31- they have 110,000 planted agarwood saplings, of which 15,000 are of suitable size for cutting in 8-10 years. Additionally, there are 500,000 saplings in the nursery. If this is the ‘picture’ of this venture, Pintanna Plantations doesn’t have enough agarwood trees to operate all 150 boilers. Despite these develpments, the company has opened branches in countries like Dubai, Saudi Arabia, and Oman and has exported agarwood products.

Private cultivators also involved 

When asked about this issue, the representative of Pintanna Plantations stated that they buy trees from private cultivators who have cultivated agarwood. However, according to the above calculations, 108,000 trees from 270 acres of private estates or 162,000 trees from 405 acres of private plantations would be needed. There are not that many trees among private cultivators to operate 150 boilers from 2021 until now. Considering these calculations, if agarwood is needed at least until the end of this year, Pintanna Plantations should have a surplus of trees. However, our findings indicate that neither Pintanna Plantations nor the private cultivators have sufficient agarwood. Moreover, even if such trees are available, they should have existed for about 6 years; meaning they are not mature enough to be used in production.

Additionally, according to the representative of Pintanna Plantations, local Gyrinops Walla (Wallapatta) is used for their agarwood products.  Gyrinops Walla is also imported for these products. However, Gyrinops Walla is only found in Sri Lanka, while agarwood is cultivated abroad. Under Sri Lankan law, it is prohibited to cut or transport local Wallapatta. Section 24 of the Forest Conservation Ordinance and Forest Regulations No. 01 of 1979, published in Gazette No. 64/14 dated 26-12-1979, states that cutting, selling, transporting, or attempting to sell Wallapatta plants is a punishable offense. However, there is speculation that the Department of Forest Conservation has allowed Kumar Dharmasena to retain a certain amount of local Gyrinops Walla for his products.

In an article the Daily Mirror produced earlier, it was mentioned that Chief Incumbent of Ashokarama Vihara, Ven. Poddeniye Sumana from Poddeniya, Deniyaya had learned that a popular cricket star was allegedly involved in cutting Gyrinops Walla from the Sinharaja Forest and was transporting it to the Ayagama area. If this is true, the forest conservation authorities should investigate whether there is a connection between the cutting of Gyrinops Walla in the Sinharaja forest, its transportation to Ayagama and the production of agarwood.

According to data obtained from Sri Lanka Customs, Pintanna Plantations Pvt. Ltd. exported its first series of agarwood products in 2021 under code number H 12119090; totaling 11 kg and earning 5,052,634 rupees. Subsequently, through a company called Pintanna Wood Oil Pvt. Ltd., additional products were exported in 2022, 2023, and until 2024 March under various codes: H-33019099, H-33074100, H-45194090, H-49019990, H-49119950, H-33013000, H-70109010, H-121119090, H-85044090, H-33072000, H-33082000, H-94053090, H-20052000, H-84232000, H-63059000, H-49111090, H-48191000, H-40169990, H-35261090, H-39261090, H-33074900, H-39172100, H-44209000, H-48219000 and H-90278000. The total weight of these exports was 1200 kg, comprising three items, and raised 37,573,437 rupees. The total export income for 2021 was 42,626,071 rupees. In these exports, wood oil, mint leaves, jackfruit leaves, Pavatta leaves, etc., have been listed. Additionally, it appears that Pintanna Plantations has disbursed benefits amounting to 380 million rupees for 3,800 agarwood trees to 60 investors in the process of earning income from agarwood products. If this is the case, it is the responsibility of the Central Bank to investigate the accuracy of this agarwood cultivation project and disclose its findings to the nation.

To inquire whether Pintanna Plantation Private Ltd had permission to keep Gyrinops Walla in their possession, we reached out to S. C. Palamakumbura, Conservator of Forests (Protection and Law Enforcement). His response was as follows: “Pintanna Plantations Pvt Ltd has not been granted a licence to retain local Wallapatta. Raids will only be conducted if there are complaints filed. If the company has imported Agarwood or Wallapatta products, please provide the source of this information. Otherwise, state that I am unable to disclose further information.”

We cross-verified the information provided by Dharmasena with Sri Lanka Customs, which confirmed that they provided us with the data of all items exported under Pintanna Plantations Pvt. and Pintanna Wood Oil Pvt. Ltd from 2021-2024. As Dharmasena mentioned, if he possesses further export information, it should be investigated separately, as stated by the customs spokesman.