Investors of the Finance & Guarantee (F&G) Group rejected a repayment plan that was put together with Merchant Bank of Sri Lanka (MBSL) and at one stormy meeting, a desperate man tried to commit suicide fearing he was going to lose his savings. Investors are demanding that all of them should be paid alike -- big or small.
MBSL Chairman Janaka Ratnayake told the Sunday Times FT his institution, which set up a management council under the Central Bank’s guidance to implement a repayment plan, received a letter signed by investors (or depositors) that they cannot abide by the payment plan and want it revised. The plan has been suspended pending fresh proposals from investors.
F&G has more than 7000 depositors with a deposit base of Rs 13 billion and the matured deposits amounts to Rs 300 million. Around Rs.1.5 billion was spent from its mobilized funds owing to increased withdrawals. This was the main reason for the current financial crisis, Chairman, F&G Group, F&G Property Developers, Mervyn Jayasinghe told investors on Wednesday at a meeting at the company’s Colombo head office.
During that time, a desperate investor tried to commit suicide by setting himself on fire at around 11.45 am.
Witnesses said about 100 depositors and investors had gathered at the office seeking details of their payments at the troubled company. At one point one man, in his mid-thirties’, poured petrol on himself and tried to light a match before being stopped by others. He was accompanied by his wife and one child. Police were called in immediately to quell the situation.
Mr Jayasinghe said the company has decided to transfer the ownership of some lands owned by F&G Property Developers Ltd (unregulated) and this process has already commenced. Angry investors said the distribution of land was done in an ad hoc manner and the value of land is less than the amount quoted by the company. Heated exchanges took place between the investors and officials and at one point Mr. Jayasinghe said that he will not pay any money to depositors as the company is now cash strapped.
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