By Faraz Shauketaly
The sleepy village of Malwana in the Gampaha District is an unlikely place for controversy of any sort but is all set to become the background for a financial scam that has many similarities with the “Sakvithi” case.
A number of commercial establishments persuaded many investors to part with their money to invest in the rambutan industry.
Some paid around Rs 250,000 for 30 perches of land. 30 perches being enough to plant 10 rambutan trees and yielding close to optimum levels by the sixth year. Initially, these companies forecasted a return based on a 6-year old tree yielding up to 4000 fruit. Today’s wholesale price is in the region of Rs 5 per fruit. Indeed, if the forecasts are even remotely accurate, the investors are set to count their rambutan investment as a singularly “good” one. The problem stems from the difference in the forecasts and the actual delivery.
Whereas the forecasts are in the region of 4000 fruit per tree, the actual delivery is more like 1000 per tree. Investors who are in the know – as opposed to purely passive investors – say that after 6 years, if a tree is yielding just 1000 fruit, then either the tree needs to be chopped down and replanted, or the methods used to maintain the trees needs to be looked at again.
The investors are also questioning the professionalism of the scientists who advise the companies. Some investors go further: they question the probity of the management companies, and that is a fairly serious charge.
Significant sums of monies are at stake, leading some investors to assume that their investment in the Rambutan industry will run aground rather like the various scams practised in Sri Lanka in the recent past – like Sakvithi for instance.