The Committee on Public Enterprises (COPE) has raised serious concerns over financial mismanagement at the Gem and Jewellery Authority (GJA), questioning the rationale behind spending Rs. 2 billion on renting a separate building instead of renovating its own facility for just Rs. 21 million, as estimated by the Central Engineering Consultancy Bureau (CECB).
Questionable Relocation and Excessive Rental Costs
COPE’s inquiry revealed that the Authority vacated its original building in 2021 due to structural issues caused by an adjacent shopping complex. Despite receiving a Rs. 3 million monthly compensation offer from the responsible company, the Authority rejected it and relocated, incurring substantial rental expenses. COPE strongly criticized this decision as an irresponsible misuse of public funds, further straining government resources.
Lack of Transparency in Gem Mining and Court Proceedings
The committee also scrutinized unauthorized gem mining activities in Heraniaka, raising concerns over the lack of proper approval processes and the unexplained contract extensions granted to private companies. COPE expressed dissatisfaction with officials’ failure to provide clear explanations, leading to recommendations for an internal investigation and possible referral to the Commission for Investigation of Bribery or Corruption.
Additionally, COPE condemned the release of a Rs. 2.5 billion gem consignment that had been seized by the court for under-valuation. Instead of imposing the maximum fine of Rs. 333,000, only a Rs. 10,000 penalty was enforced. Officials argued that the case was a breach of conditions rather than a criminal offense, but COPE dismissed this justification, accusing them of misleading the committee.
Regulatory Gaps in Imports and Exports
The committee further highlighted significant gaps in the regulation of gem imports and exports. Despite its mandate, the Authority lacks a dedicated imports division, leading to taxation inconsistencies. Data shows that between 2022 and 2024, only 1,664.06 kg of gems were re-exported out of a total of 46,815.94 kg imported, raising concerns about potential tax discrepancies.
As a corrective measure, COPE has directed the Gem and Jewellery Authority to develop a robust regulatory framework to enhance transparency in exports and ensure proper revenue collection while fostering industry growth. The committee also demanded a comprehensive report detailing gem imports, exports, and tax evaluations.
