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A top-level inquiry is on into a reported loss running into millions of rupees to 'Sri Lanka Telecom' as a result of a swindle by a foreign company in a project to set up 'Internet Protocol TV' in the country.

SLT subsidiary 'Visioncom (Pvt.) Ltd.' is operating the project, according to a senior SLT official.

Several officials involved in the fraud have been given transfers, while the fraud company and its local agent have been blacklisted.

A former top official at SLT had awarded the tender for the project to China's 'UTStarcom' in violation of tender procedures.

He, together with certain directors of SLT had prevailed over the objections to the deal, said the senior official.

The equipment needed for the project had been imported through 'Just In Time Group' (JIT), the Sri Lankan agents for 'UTStarcom.'

Therefore, 'Board of Investment' approved SLT had been forced to pay more than 400 m as customs tax for the goods.

The Chinese company had imported the equipment through its local agent in an attempt to conceal the actual prices of the import, said the senior SLT official.

The project equipment has been installed in such a way that the IPTV project could only be functional with 'UTStarcom' products.

Therefore, SLT will have to spend very high prices for spare parts to be bought from the Chinese company, said the senior SLT official.

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