Co-operative body suffers Rs. 167 million loss due to failure to recover loan issued in 2013
14-May-2026.
A loss of approximately Rs. 167 million has been incurred due to the failure to recover a loan issued in 2013 to a co-operative institution through the surplus funds of the Department of Co-operative Development.
Officials informed the Committee on Public Accounts (COPA) that loan repayments had been halted after 2015 as the institution began operating at a loss.
The COPA meeting, originally chaired by MP Kabir Hashim, was held recently in the Parliamentary complex under the chairmanship of MP Chandana Sooriyarachchi, as MP Hashim had informed that he was unable to attend.
During the meeting, the Department of Co-operative Development was summoned before the committee, and the Auditor General’s reports for the years 2021–2023, the report for 2024, and the department’s current performance were reviewed.
The committee also examined the present status of recommendations issued at the COPA meeting held on August 5, 2021.
It was revealed that the loan provided in 2013 to the Building Materials Co-operative had been issued in violation of co-operative regulations, and that failure to recover it had resulted in a loss of around Rs. 167 million. Officials stated that due to the institution operating at a loss, repayments had been discontinued after 2015. It was decided that a report on the matter would be submitted to Parliament.
Meanwhile, the National Audit Office pointed out that over Rs. 31 million issued to 28 co-operative societies through the Co-operative Development Fund has remained unrecovered for periods ranging from 12 to 59 years. Officials said that since 22 of these societies are registered under Provincial Co-operative Development Departments, direct intervention is not possible. The committee therefore recommended that a new Co-operative Act be drafted urgently to facilitate recovery of these funds.
The committee also held detailed discussions regarding a Rs. 50 million project planned for 2024 to distribute one-day-old chicks to entrepreneurs as a solution to the country’s egg shortage. Investigations were conducted into why the project was not implemented at district level and was instead limited only to seven Divisional Secretariat divisions in the Gampaha District. The committee chair instructed officials to submit a comprehensive report on the matter.
