Justice, they say, if delayed is justice denied. For many months and many moons gone by, depositors of the failed Golden Key Credit Card Co popularly known as GK now after fraud and deception crept into a, once popular and credible organisation, have looked at the stars and wondered whether they would get their money back or see that justice prevails.
The latter is now on the cards with the Attorney General Mohan Peiris informing the President this week that indictments are finally ready against Lalith Kotelawala, his wife-on-the-run Sicille and other directors for fraud, deception and other criminal acts in the use of depositors’ money worth Rs 26 billion. It is said to be the biggest scam in Sri Lanka.
For nearly two years, the authorities have struggled to put a complicated and complex case together with the trail of investments made by Golden Key here and abroad in a maze of Ceylinco and non-Ceylinco companies being hard to follow. The elusive trail of Sicille Kotelawala hunted by Interpol and believed to be hiding somewhere in Singapore, Dubai or Malaysia has also dogged investigators.
During this time, a few among the over 7,000 depositors have committed suicide or died of health complications caused by the stress of losing their money while others lost their only source of income – a heavy price to pay after relying on a company that attracted deposits at high rates of interest.
The other big scammer – Sakvithi Ranasinghe – who vanished abroad later to re-surface in Sri Lanka and get nabbed by the police is thankfully now behind bars.
While this is good news for the struggling, ailing and agonising GK depositors, the other bit of news that came their way this week was not all that rosy as reported by the Presidential Secretariat.
On Monday it reported that a meeting presided over by President Mahinda Rajapaksa to discuss the Golden Key crisis and including all parties concerned including depositors had endorsed a decision to set up a new company to acquire all GK assets and offer shares in the new company to depositors.
But that’s not exactly the way the meeting went. Depositors while endorsing the formation of the new company, a Special Purpose Vehicle (SPV), were not in favour of the way it was going to be run. At the end of the meeting when disputes arose over the structure and formation, the President had reportedly told the depositors and other parties concerned to sort out the issue with the Supreme Court.
It was in mid-2009 that the Court in a directive by then Chief Justice Sarath Silva, ordered the setting of this SPV to accumulate all GK assets, sell them and repay depositors. The Central Bank was asked to come up with the modalities of the company but that took a long time since the process of ascertaining the assets and its value was a time-consuming process, similar to the complexities of filing indictments against the Kotelawala couple.
The value of assets is little over Rs 2 billion, according to government valuation, while the dues to depositors is Rs 26 billion; that’s worst that the national budget gap! Bearing in mind that the sale of assets could in no way meet the liabilities, the Central Bank together with the Committee of Chartered Accountants that is involved in the process came up with a model where some of the assets would be sold, the money ploughed back and re-invested while a few companies would be run by the SPV under professional management. The rationale was that profits that accrued by this mechanism could, over time, be sufficient to meet all the dues of depositors.
Depositors over the past several months have expressed their dismay over the valuation saying government valuers have under-valued these properties and they are worth much more.
At the meeting with the president, GK depositors Association President Anusha Emmert said that issuing shares to offset their deposits was unacceptable as most of the depositors are in urgent need of money for their day-to-day living.
She also filed a new re-payment plan at the meeting, where elderly and ailing depositors and those in urgent need of money for living expenses who have a deposit of below Rs 5 million be paid by 2013; over Rs. 5 million up to Rs.10 million be paid by 2014, and so on after selling the assets.
With desperation creeping in over the past 18 months, depositors have split into two rival groups and having disputes amongst themselves over the right formula for payment or relief.
The GK case comes up before the Supreme Court on October 27 and depositors would be eagerly awaiting its outcome, though a speedy payment process for them is unlikely to happen.
In the meantime however they know that the long arm of the law has finally reached the perpertrators of this terrible crime on hundreds of young and the old who wanted a little more money in their hands, than that doled out by the regulated, financial system, to make ends meet in a country where cost of living has come down only on paper – not in the marketplace. |
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