Failure to recover swindled TV rights fees irks cricket clubs

Despite the recommendations made by the Auditor General to recover the swindled TV broadcast right fee by Cricket Board officials during the 2018 South African and England tours of Sri Lanka, failure to take legal action against the offenders has irked number of cricket clubs in the country.According to the club officials it is the responsibility of Sri Lanka Cricket (SLC) to uplift the game in rural arears and provide necessary facilities for underprivileged up and coming young cricketers instead of swindling its income.The Auditor General’s (AG) 2019 special report on SLC reveals how these officials have diverted the International TV broadcast right fee to offshore accounts depriving SLC billions of rupees.

Although the National Audit Office (NAO) unearthed the entire fraud and submitted the report to the Parliament, the law enforcement authorities are yet to request the Attorney General to take legal action against the swindlers.
When the Daily Mirror contacted Auditor General W.P.C. Wickramaratne to find out what action he can take against those who failed to implement the recommendations he has made the AG said that he has presented the report to the parliament which was subsequently referred to the oversight committee- COPE. “My duty is to present the report to the parliament and it is up to the relevant parties to take further action, but not me,” Wickramaratne said.

The failure to take legal action against the offenders who have swindled TV broadcast right fees during the 2018 South African and England tours of Sri Lanka has irked number of cricket clubs in the country

The report reveals how emails have been forwarded to Sony Pictures Networks India Pvt Ltd (SPNI) by the Head of Finance (HoF) requesting to deposit the TV Rights fee due to SLC to four offshore accounts -Banamex Bank in Mexico, BBVA Compass Bank in Birmingham, USA, Wells Fargo Bank NA in New York and Hang Seng Bank in Hong Kong, claiming that the Cricket Board’s official bank account at BoC Torrington Branch has exceeded its tax credit and cannot receive or make payments until the issue is resolved within the bank.

The AG in his recommendations has stated that legal action should be taken against the officers who should be responsible and prompt action should be taken to prevent such occurrences in future.
It also says that particulars of the bank accounts specified should be examined either through a diplomatic intervention or by other means and action should be taken to recover the said money. All foreign accounts maintained in favour of SLC should be examined by the Cricket Board.

The e-mails associated with the questionable fraudulent transactions have been deleted the NAO states. However, most of these e-mails have been retrieved by the IT Manager at SLC with the assistance of the Sri Lanka Computer Emergency Readiness Team (SLCERT), which is an external company where its expertise is in computer technology and works towards ensuring accuracy related to tracing fraudulent transactions made via emails.

The trail of emails shows how the then HoF Piyal Dissanayake had sent several e-mails to Sandeep Patil of Sony Pictures Networks India (SPNI) to transfer the due SLC money to these four offshore banks from time to time.
On July 12, 2018, Dissanayake had sent an email to Patil copying the same to Chief Executive Officer (CEO) Ashley de Silva giving instructing to transfer 35% of the South African tour’s TV right fees to Wells Fargo Bank claiming that the Cricket Board’s official BoC account has exceeded its tax credit and cannot receive or make payments until the issue is resolved within the bank.

The e-mails associated with the questionable fraudulent transactions have been deleted the National Audit Office states 

This e-mail states further, ‘Dear Sandeep, we received a memo from our bank that our bank account with the BoC,

has exceeded its tax credit and cannot receive or make payments until the issue is resolved within the bank.
‘Henceforth our account team, has instructed that all subsequent payment, along with today’s transfer should be made with our bank account details with Wells Fargo Bank as detailed in the attached invoice.
‘I await your response- PiyalDissanayake’.

 
Later, on July 16, 2018, Dissanayake once again had written to Patil requesting him to ignore the given bank details and to credit the said money to BBVA Compass Bank.
The e-mail states, ‘Kindly find our attached bank details with BBVA Compass Bank for subsequent payment. Our finance team directs that we use our Bank account with BBVA Compass Bank for payments and kindly ignore the bank details with Wells Fargo Bank that was sent earlier’.

On July 24, 2018, Dissanayake confirms with Patil the receipt of US$ 436,531 as the second instalment of 35% of TV Rights fee. Dissanayake in the same email has requested Patil to make the balance payment of US$ 187, 084.75 as the final instalment of 15% to the same account.
However, on August 8, 2018, Dissanayake once again has requested Patil to call back the money they have transferred to BBVA Compass because of a new fiscal policy in United States and remit the money to an account which he will give later.

The report reveals how emails have been forwarded to Sony Pictures Networks India Pvt Ltd (SPNI) by the Head of Finance (HoF) requesting to deposit the TV Rights fee due to SLC to four offshore accounts

The email states, ‘Dear Sandeep, we are currently facing some new development in regard to United States Fiscal Policy that was initiated in USA, some months ago. We hereby confirm receipt of the payment of the said sum to our BBVA account, but the money is placed on no debit due to the fact that the new policy stipulates that any company that does not have their head office within US soil or does not have or host any event or programme related to the reasons of the payment, should be placed no debit pending when necessary demands are met by the beneficiaries of the payment.

Unable to meet demands

‘Due to this reason, we have not been able to access the payment made because we were unable to meet those demands stipulated by the US policy law. We urge you to contact your bank and ask them to call the funds made to our BBVA account and make the payment using our bank details that will be made available to you. Our bank confirms that this process will not take more than 48 hours – PiyalDissanayake’.

On August 17, 2018, Dissanayake writes back to Patil requesting to update SLC bank account as Banamex bank, as detailed on the invoice in SPNI vendor master for subsequent payments.
Meanwhile SLC has sent a payment authorization letter to SPNI on SLC official letterhead requesting to remit TV Rights fee for England tour of Sri Lanka 2018 to Hangseng Bank in Hong Kong.

This letter dated September 4, 2018, further states, ‘Sequel to the meeting held with the board member of SLC on September 4, 2018, on issues bordering on our accounts being placed on no debit by Sri Lanka tax regulator board and other internal issue we are currently witnessing which makes it quite difficult for us to be able to access or receive payment in Sri Lanka until the issue is resolved.

According to the written statements presented to the NAO by the IT manager on May 2, 2019, and June 26, 2019, the former HoF has deleted certain e-mails from his account

‘The board members of our institution have made a resolution for you to take this as our authorization to make payment for the England tour, the pending payment of US$ 187, 084.75 (which is the final instalment of 15% for the South African tour) through our Asia associates bank account details in Hong Kong who has served as our intermediary for over10 years in many financial issues as detailed in the mail trail below and also 
contained in the attached revised invoice.

‘The upcoming England tour payment plan is schedule below along with our partner account details with Hangseng Bank. Please be advised henceforth subsequent payments should be made through this channel as agreed by our board member until the issue is resolved.

‘1st payment US$ 5,564,404.50 (50% of US$ 11,128,809)
2nd payment US$3, 895, 083.15 (35%)
3rd payment US$ 1,169, 321.35 (15%)
Payment details-
Bank: Hangseng Bank Hong Kong
A/c name:  FanyaSilu Co. Ltd
Further credit to Banamex bank, Mexico’.

Although SLC’s payment authorization letter to SPNI stats that FanyaSilu Co. Ltd has served with them as their intermediary for over10 years in many financial issues, as per the records found on the internet and pursuant to the internal inquiry conducted by SLC’s IT Manager, FanyaSilu Co. Ltd mentioned as the beneficiary in this transaction has been incorporated on Sep.27, 2017.

Following the receipt of the said instructions, Patil has sent an e-mail to Dissanayake on September 6, 2018, at 11.52 am inquiring why he has given the beneficiary’s name as FanyaSilu Co. Ltd when it should be SLC.
It further states, ‘As per the bank details provided by you the beneficiary’s name mentioned as FanyaSilu Co. Ltd. Could you please check the beneficiary’s name, as it should be SLC.
‘Also let us know whether we can transfer the funds directly to the Banmex Bank details of SLC. If yes, please send us the revised invoice with Banmex bank details of SLC on the same’.

In response to the above, CEO Ashely de Silva from his official e-mail ([email protected]) has replied to Patil on the same afternoon at 3.55pm to make payments as directed by Dissanayake.
It states, ‘Dear Sandeep, kindly make payment as directed by Piyal (Dissanayake). This is a result of our issues with our banks in Sri Lanka and the decision to make use of below guide was given by SLC Board Management. Thanks and regards Ashley’.

Meanwhile, Amalie Thrimavithana- Country Manager in SL for SPNI has also sent an e-mail to the HoF, questioning the validity of the beneficiary details in consideration of the discrepancy found in the beneficiary’s name.
However, by email dated September 6, 2018, the HoF has affirmed Patil, the correctness of the beneficiary’s name.  

Although the CEO has given the above instructions, when the government audit requested details of the aforesaid offshore bank accounts from De Silva, by letter (Ref: NAO/FOA/SLC/2019/INF/15) dated March 8, 2019, the former has confirmed that the said bank accounts are not SLC accounts, but connected to cash fraud relating to transactions of Sony Pictures.  

According to the information furnished by the Cricket Board IT Officer, HoF had requested Sandeep Patil to credit these money to these foreign bank accounts from time to time and SLCERT confirms that these email messages had been sent via HoF’s official email account.
Although the then President SLC, was requested to give more details of the aforesaid bank accounts by the government auditors by letter (Ref: NAO/FOA/SLC/2019/INF/19) dated March 18, 2019, the former has not submitted the requested details.

Be that as it may, according to the written statements presented to the NAO by the IT manager on May 2, 2019, and June 26, 2019, the former HoF has deleted certain e-mails from his account. Subsequently, the said deleted e-mails were retrieved and they were made available to the audit.

According to the audit report, when submitting an invoice by SLC, the account bearing No: 8746681 of BoC, which is the official bank account should be mentioned in the invoice as the account to which the money should be credited. However, when examining the invoices sent to SPNI, offshore bank accounts opened in the name of SLC have been stated in the invoices instead of the official bank account.

Contrary to the emails sent by the HoF and the CEO informing SPNI that the Cricket Board’s official bank account at BoC Torrington Branch has exceeded its tax credit and cannot receive or make payments until the issue is resolved within the bank, the audit report states that this claim was not verified during the audit that such a problem existed with the SLC official bank in Sri Lanka.

By statement dated June 7, 2019, to the NAO, HoF had stated that he had not sent or even was not aware of the questionable email messages. Even though the HoF says so, it has been confirmed by the SLCERT report that he had used Mymail application to send these e-mails.

Even though the CEO in his written statement to the NAO stated that he too was not aware of these questionable emails he is said to have forwarded from his email account and received to his email, the SLCERT report confirms that these emails had been sent through the email account of the CEO.

As per the audit report, when direct information was called from SPNI on the payment paid by them as the final instalment of 15% for South African tour of Sri Lanka, they have confirmed that the money had been remitted on August 1, 2018, to BBVA Compass bank in USA in favour of SLC.

Although the HoF and CEO in their respective statements to the government audit have claimed that they were not aware of these questionable emails, the audit report states that they have no evidence to confirm that the HoF had not stated to send these money to any offshore accounts and the CEO was not aware of these transactions.
Although it is confirmed that the CEO was well aware of diverting the SLC’s TV Rights fee to offshore bank accounts, in March 2019, Superintendent of Audit, National Audit Office D.G.A.S. Anulasiri has requested the former to submit the details of these bank accounts for an independent forensic audit.
Anulasiri’s letter states, ‘At the verification of the backups of e-mails of former HoF, it was observed that four bank accounts are maintained by SLC in international banks.
‘Therefore, please furnish the following information relating to the foreign bank accounts for audit purposes.

i) Certified copy granting approval by the Executive Committee SLC to open these accounts
ii) The purpose of such accounts and dates of opening
iii) All the bank statements of each bank account from the date they were opened and its reconciliation statements
iv) Authorized signatures for payments and its approvals
v) Authorized transaction from such bank accounts
vi) Where it shows in the financial statements
vii Bank confirmations
‘Your early response is very much essential to reach the deadlines please’.

Following this, CEO on March 29, 2019, has written to Wells Fargo Bank, Banamex Bank and BBVA Compass Bank seeking bank account and transaction details of bank accounts operated under the name of SLC.
The letters states that, ‘our records indicate that SLC does not operate any such accounts in Wells Fargo Bank, Banamex Bank and BBVA Compass Bank and money which had been transferred by SPNI may have been erroneously deposited to the said accounts. It would be much appreciated if your bank upon receipt of this letter provides the requested information in order to comply with applicable audit requirements by SLC’.
Meanwhile, giving evidence before the Committee on Public Enterprises (COPE), on September 3, 2019, the CEO has confirmed that SLC has not opened up any offshore bank accounts.

“We have not transferred SLC funds to any bank”- Ashley

Although the Auditor General in his recommendations has stated that legal action should be taken against the 

fficials who should be responsible and prompt action should be taken to prevent such issues from taking place, when contacted, SLC CEO Ashley de Silva said that the NAO wouldn’t have issued any report as any such misappropriation hasn’t taken place at SLC.
“We are not accountable to the media. We have not transferred SLC funds to any bank. I am not aware of any offshore bank accounts. If you want, get clarification from the Auditor General. I have not seen an Audit report regarding the issues you are talking about. Don’t report anything which is not correct,” De Silva said. 

Thilanga claims investigation was initiated after he relinquished his post 

Thilanga Sumathipala, the former President SLC, responding to a question forwarded to him by Daily Mirror, said that this investigation was initiated after he relinquished his post in office. According to him, although he was in charge of SLC in 2018, former Minister Faiszer Musthapa appointed Kamal Padmasiri to SLC, and it was during this period that the investigations commenced and the CID too later initiated an inquiry regarding this matter.