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Sri Lanka's John Keells Holdings has said that losses resulting from the Supreme Court's recent ruling against its bunkering unit Lanka Marine Services (LMS) may reach up to two billion rupees (US$18.8 million), according to local media reports.

The total cost announced by John Keells is far higher than previous estimates of 1.3 billion rupees (US$12 million) calculated after the court ruling on July 21st.

John Keells said its subsidiary had been asked to pay 375 million rupees (US$3.49 million) in penalties by revenue authorities, which are currently being appealed. LMS is said to have requested to be taxed as an export company, which would then attract a lower rate of taxation.

Keells said in a statement that it had received the formal assessments on the tax due, and that the maximum liability in the July quarter could be 2.032 billion rupees(US$18.8 million) with a cash outflow of 1,750 million rupees (US$16.3 million).

The minimum cost was estimated to be 724 million rupees (US$6.7 million) with a cash outflow of 622 million rupees (US$5.8 million).

Last week LMS said that it had deposited 153 million rupees (US$1.44 million) into a separate bank account as compensation payment to workers and in line with the amount requested by the Commissioner General of Labour.

The company has also said that it will have to provide for losses of fixed assets and inventory.

Earlier this week, the country's treasury secretary, Dr. P.B Jayasundara, resigned after the Supreme Court had ordered him to pay a fine of 500,000 rupees (US$4,645) for his involvement in the privatization of LMS.

Former Deputy Secretary of the Treasury, Sumith Abeysingha, has been appointed as the new Secretary of Sri Lanka's Finance Ministry with immediate effect.