Depositors waiting outside court |
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Details of dealings and financial irregularities of the Golden Key Credit Card Co. were revealed before the Mount Lavinia Chief Magistrate when the Golden Key financial misappropriation case was taken up for hearing on Tuesday.
Making submissions on behalf of the CID, Deputy Solicitor General (DSG) Sarath Jayamanna told court that preliminary investigations revealed that a Rs. 15 to
Rs 20 billion fraud was reported and this is much higher than the country’s defence expenditure amounting to Rs. 16 billion. He said that this was the biggest financial scam reported in Sri Lanka .
Investigations revealed that the financial statement and audit report of the company had been changed and adjusted with the consent of the senior management to deceive the board of directors. No board meetings were held during the past four years. The DSG said these financial statements and audit reports were prepared to show profits but the company was actually running at a loss. According to the financial statement 2007 the Golden Key Credit Card company posted a profit of Rs. 20 million but the actual loss was amounting to Rs. 7 billion. The auditor’s signature had also been forged and the CEO of the company and one of the Vice Chairmen of a Ceylinco group company had allegedly siphoned funds of the company, it was revealed in court.
Some of the directors walking into court |
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A sum of Rs. 78 million had been given to a person who had no connection whatsoever with the credit card company. Manoj Chaminda Jayalath of Ceylinco Insurance, a suspect who also served at the Golden Key, was given Rs.33 million to hand over to various other institutions. However of this money he had taken Rs 15 million and deposited in his own account at the Seylan Bank, court was told.
Ceylinco group chairman, Lalith Kotelawala and 10 other directors of the Golden Key Credit Card Company were released on bail while its Deputy Chairman Michael Khavan Perera, Finance Director Saradha Sumanasekara and Manoj Chaminda Jayalath of Ceylinco Insurance were remanded till January 16 in connection with the alleged Rs.26 billion financial scam.
Magistrate Harsha Sethunga imposed a personal bail of Rs. 25 million on Mr. Kotelawela and the others -- Suramya Karunaratne, Niranjan Fernando, Daniel Jegasothy, Padmini Karunanayake, Bandula Ranaweera, Renuka Carmaline de Alwis, Punya Shantha Ranatunga, Priyantha Dewaprasad Jayasekara, Padma NandaniKumar and Lasantha Tissa Wickramasinghe.
Mr. Kotelawela and the other directors appeared in court following a Criminal Investigation Department (CID) investigation on the alleged financial scam at the Golden Key Company. The magistrate ordered the Chairman Ceylinco and other eleven directors to inform court before they leave the country on any overseas visit.
The court also directed that the order be forwarded to the Controller of Immigration and Emigration and directed the CID to complete the investigation and forward a report on January 16.
Midway during the proceedings Mr. Kotelawela had requested a chair for him to sit down as he felt uneasy.
The Court was informed that the CID was continuing investigations on a complaint made by M.M.S. Oththampitiya, General Manager (Investigation) of Security Corporation of the Ceylinco CISCO Group Company. According to his complaint several financial irregularities, mismanagement of funds and misappropriation had taken place in the Golden Key Company with the alleged consent of Deputy Chairman of the company Khavan Michael Perera. In a lengthy submission which lasted around two hours former Attorney General C.R de Silva, PC, counsel appearing for Lalith Kotelawela and three other directors, told Court that the Central Bank used to supervise Golden Key Company and it had accepted security deposits issuing credit cards.
He argued that his clients were not suspects and they were listed to assist the CID investigation. Even though the suspects in a case could be prevented from leaving the country, it could not be done on the witnesses in a case. It would be a violation of their fundamental rights for movement, he said.
He also assured that his client Mr Kotelawela will undertake the responsibility of refunding the money of all depositors from his personnel assets. He brought to the notice of the court that his client had stepped into resurrect several finance companies like Panadura Finance and Guarantee Ltd when they were in dire straits. Such a person will never run away like the Sakvithi owner, he said . “We have already started to pay back deposits less than Rs. 1 million. This can not be done overnight. However the Chairman will settle it from his personnel assets,” he added. Another director, Ms Sicilia Kotelawala was abroad and didn’t attend court.
The counsel said she would be present on the next date. The other two lawyers who appeared for Golden key company Finance Director and employee of the Ceylinco Insurance Company told court that the Chairman of the Ceylinco group Lalith Kotelawala and all the other directors should take responsibility for the misappropriation of Golden Key Funds and that everyone is equal before the law. They noted that the Chairman and other directors cannot say that they were totally unaware about the transactions of the company. The court also ordered the CID to take copies of all the documents relating to the transaction that had a taken place in the Golden Key Company and to seize the computers containing data on financial transactions.
Ceylinco Chairman asks Golden Key depositors to wait till he settles financial crisis
Outside the office |
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Around a 100 angry depositors of the collapsed Golden Key Credit Card Company on Thursday gathered outside the Ceylinco Consolidated office at De Fonseka Place in Colombo and demanded that its Chairman Lalith Kotelawala refund their security deposits ranging from Rs. 1OO, 000 to over Rs 100 million.
They tried to forcibly enter the premises but were prevented by police. After a heated argument with the company officials who were present at the office premises, a group of 10 depositors were allowed to enter the office for a discussion with Mr. Kotelawala. Other depositors waited patiently outside the gate of the Ceylinco Consolidated.
Mr. Kotelawala told the depositors that his company pioneered the credit card industry in Sri Lanka in the early 1980s and was responsible for setting-up the initial Merchant Network that has now expanded and is currently utilized by all credit card operators in the country but unfortunately the company had to face a serious financial difficulty due to a fraud committed by some of his employees. At this point, anxious depositors noted that what they want is their money and not a long explanation.
A depositor who participated in the discussion told The Sunday Times FT that Mr. Kotelawala then told them that they can go to the police or courts to get their money back. The depositors pleaded from him even to pay the interest of their deposits as they are depending on the money which they have invested in the Golden Key Company which paid a high interest rate at that time. Mr. Kotelawala informed them that he will pay the money after selling the company’s biggest assets -- an incomplete four storeyed building on 3½ acres of land at Kirimandala Mawatha, Narahenpita and the Eye and ENT Hospital in Rajagiriya, Borella or disposing of his shares in the Seylan Bank. He urged the depositors to wait till he settle this issue.
On Thursday, a doctor at the ENT hospital, owned by Golden Key, said the hospital had been taken over by Ceylinco Insurance and the staff had been informed of the change in ownership. |
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