HPT Ltd and collapsed finance companies – 1989/2010
It is now more than 22 years that the HPT Ltd collapsed in 1989/90. It was a well- established finance company in 1959.
Nearly 3000 depositors were made destitute overnight due to the failure of the Department of Supervision of Non- Banking Financial Institutions of the Central Bank (CB) of Sri Lanka to monitor the institution.
Having a nominee Director at the HPT Ltd, the CB knew the real situation prevailing at that time and should have exercised greater care and protected the interest of the depositors, who invested their commuted Pensions and Provident Fund expecting a higher income to match the ever escalating cost of living.
At the time the 3000 depositors would have been 55 or 60 years old retiring age. Today if they are alive, they would have passed the Bibical age of threescore years and ten (70 years), and presently would be 75 to 80 years old sick and feeble, and with the escalating cost of living and the skyrocketing prices of drugs and vitamins, they may not live long. I am sure less than 500 are now living while many committed suicide. While it must be said to the credit of the Chairman and Deputy Chairman of the HPT Ltd, they did not desert the depositors then, some other directors of recently collapsed finance companies have gone underground and are living in comfort abroad, with the poor depositors’ money. No criminal action appears to be taken by the CB against these bogus directors who were only confidence strictures from 1989/90 to date-Golden Key finance companies. It was very foolish for some depositors to ask for liquidation, but to leave to the original directors to clear up the mess.
Thanks to the former President Chandrika Kumaratunga when she was returned to power in 1994, she directed her officials to take meaningful steps to settle the depositors of the HPT Ltd.
The HPT directors in consultation with the CB decided in the first instance to repay 50 per cent of the depositors’ liability on 27th June 1996, after the sale of the Head Office building.
There is a balance of 50 per cent to be paid to the HPT depositors. The liquidators’ state that several lands belonging to the HPT Ltd, are vested with the Land Reform Commission and that they are helpless.
The few thousands of rupees that the liquidators are presently getting as installments from HPT Ltd, properties are been used to maintain the liquidators office.
By far the most valuable is the block of land called Kolonumekumbura of over two acres situated along the Nugegoda-Pepiliyana High Level Road which could fetch well over Rs. 200 million in the present market.
President Mahinda Rajapaksa should put down his foot and instruct his officials to settle the claims by releasing these lands or pay compensation to the depositors.
The collapse of finance companies could have been averted if only the CB read Section 10 of the Insurance Corporation of Sri Lanka Act No. 2 of 1961, which require the insurance of all deposits held by finance companies.
At that time of issuing licences for finance companies to do business, the CB should insert this clause in any agreement prior to the issue of the license. President Rajapakse should be urged not to place too much of confidence in the CB.
Do we need the Department of Supervision of the non-Banking Financial Institutions who have mislead the poor of the country and made thousands of depositors destitute overnight, if they don’t follow basic safeguards?
Has the CB sought the assistance of Interpol to arrest bogus directors of these collapsed finance companies in the last 22 years?
A Commission with retired Supreme Court judges and businesspersons should be appointed immediately with a time frame and in the case of those found guilty, their wealth should be confiscated by the state.
Justice delayed is Justice denied. We must leave this world a better place than it was found, as we are mere passengers in transit in this planet and leave all our wealth behind.
Fred Rodrigo Sathianathen
Melbourne, Australia.
Follow @timesonlinelk
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