The new distillery will come up in Ampara in eastern province, reports say.

A leading government minister has intervened to get the license for the company, and top officials of the provincial excise authority have also got involved to grant the permission for the location of the distillery.

Head of W.M. Mendis is Arjun Aloyceus, the son-in-law of former Central Bank governor Arjun Mahendran.

It comes under Perpetual Capital Holdings, which has been accused over the treasury bond issue controversy.

This is how the logo of W.M. Mendis company was displayed in list of its affiliates on a table calendar distributed to its clients.

Meanwhile, Excise Department sources allege W.M. Mendis company has furnished doctored production reports to evade paying duty due to the state.

Although it officially claims around 24,000 litres of liquor are manufactured a month, the actual figure is around three times of that amount, reports say.

There is suspicion as to how it can give a quart of arrack to wine stores at Rs. 180 per bottle, when the duty due to state alone is Rs. 185.

An estimated Rs. 600 million is lost to the state due to this duty scam by W.M. Mendis company.

Attempts by Sri Lanka Mirror to reach Arjun Aloyceus to obtain a response were unsuccessful.