More arrests in Golden Key case

More arrests are expected to be made over criminal misappropriation of funds of the Golden Key (GK) Company after the fraud case took a different turn with the detention of powerful Ceylinco Chairman Lalith Kotelawala on Thursday.

Mr Kotelawala was remanded by the Mount Lavinia Chief Magistrate Harsha Sethuga till March 11 while an open warrant was issued for the arrest of his wife, Sicile who has been in Singapore since the inception of the case. The Magistrate rejected the medical certificate submitted on behalf of Mrs Kotelawala. The Attorney General (AG)’s Department sources said the CID has been instructed to carry out in-depth investigations into GK affairs to arrest all those involved in missappropriation of public money.

Lalith Kotelawala	Sicille Kotelawala

The suspects have been detained for financial misappropriation and to prevent public commotion among other reasons, police said. Counsel for the suspects have rejected the public commotion issue saying protests will continue even if they are in remand.Mr Kotelawala was admitted to the prison hospital on Friday for an undisclosed ailment. Several high-powered government officials and VIPs visited him in prison on Thursday night, prison sources said. All aspects of financial dealings of the company will be probed by the CID sleuths while several alarming details have already been uncovered, the sources said. CID investigations have been intensified with the deployment of special teams headed by Police Inspector Mihindu Abeysinghe who has taken over the GK probe from Inspector S. Vishvanathan.

The magistrate issued a 10-day ultimatum to Golden Key management headed by Mr Kotelawala to show their commitment on the repayment of depositors money totalling Rs 26 billion.

The GK management has been asked by the Attorney General to come up with a considerable amount of hard cash acceptable for aggrieved parties within this period to find some redress to GK depositors before the situation will worsen as public protests mount. Aggrieved depositors have intensified their campaign with growing protests against the company and stoning of their offices. On Thursday, when the Magistrate order to remand Mr Kotelawala was announced, a crowd of depositors – outside the courthouse -- cheered.

The sources said there is also a possibility of freezing Golden Key assets if there is evidence to prove charges of criminal misappropriation propriation of funds against the company . In court, Ms Padma Nandini. Kumari, Chief Operating Officer of Golden Key and PA to Deputy Chairman Khavan Perera, was remanded till March 11 along with other suspects – Mr Perera, Finance Director Saradha Sumanasekara, Manoj Chaminda Jayalath of Ceylinco Insurance, M. Nallanthuvan, former Internal Auditor, and directors Suramya Karunaratne and Niranjan Fernando.

At the outset in court, Deputy Solicitor General Sarath Jayamanna told the court that there is strong evidence to prove charges of financial misappropriation of the GK Company by the Ceylinco chief and he should be made a suspect of this case. Details of the manner in which the directors had siphoned the GK money to nine subsidiary companies of the Ceylinco group have been revealed during the CID investigations which are being carried out on various aspects, he said. Millions of rupees were taken out of the country to set up companies in other countries including in Australia. One such company was Golden Key Investments Australia Ltd.

It was revealed that from GK, Kotelawala as chairman drew Rs. 3.5 million, another Rs. 500,000 for the Sarana charity fund, Rs. 2 million for his SOLO U charity fund as well as Rs. 400,000 as directors’ fee and millions of rupees for various other activities. All this was public money, he said. Mr Jayamanna noted that the country’s economy had been affected badly due to these financial dealings and Mr Kotelawala has done nothing to refund the depositors money. He in fact told the depositors to collect their money from the AG’S Department.

Urging the court to make Mrs Kotelawala a suspect of this case the Deputy Solicitor General said that her medical certificate cannot be accepted as it fails to indicate the ailment and she should submit a medical certificate from a Singapore Government Hspital. He added that it is now clear that Mrs. Kotelawala is trying to evade police arrest. Investigations revealed that she had drawn millions of rupees from the Golden Key Company for her own use including foreign trips. When she was retiring from the post of director of Golden Key company she had drawn a gratuity of Rs.4.5 million for 20 years service although she served the company for only 17 years.

Mr Jayamanna disclosed that Ms Kumari wielded the powers of a deputy chairman and she had Rs 144 million in her GK account. She also traveled overseas along with Mr Perera. He said that Ms Kumari had made several trips to Australia using GK money and she failed to give any valid reasons for her foreign trips during CID interrogations.

He informed court that Romesh de Silva, counsel for Lalith Kotelawala had participated in a meeting held at the AG’s office to discuss the repayment plan and the setting up of the Trust. But his proposal to deduct the rebate and pay the balance amount to depositors had been rejected by the AG and counsel for the depositors. He urged the court to issue an ultimatum of 10 days to submit assets valued at Rs. 26 billion to refund the money of depositors.

He added that Kotelawala’s counsel had brought cheques amounting to Rs 200 million to the AG’S office on Wednesday, February 25 to make repayments of depositors who have deposits of less than Rs 1 million. This was not accepted, he said.

Making a bail application, Nalin Ladduwahetti, counsel for Suramya Karunaratne, told the court that his client rejects the allegation of siphoning a sum of Rs 6 billion to nine affiliated companies. He added that it is unfair to make allegations against an employee of the company based on a financial report prepared by another employee of the company. He said that his client was a paid employee of the company and he was not involved in any fraudulent act. He brought to the notice of the court that Lalith Kotelawala should bear full responsibility for the problems in the financial services sector.

Earlier Anil Silva, counsel for Khavan Perera, said he has no intention of appealing for bail as it is now clear that the prosecution is making allegations against high officials of the company and sending them to remand prison one by one except Lalith Kotelawala to satisfy the depositors. The AG’s Department was following the same strategy, he said, urging that all persons should be treated alike.