“Don’t use our money to pay GK depositors,” Ceylinco Insurance employees say
View(s):Unions representing employees at Ceylinco Insurance (General) and Ceylinco Insurance (Life) have expressed concern over efforts to use the money of employees to settle Golden Key (GK) depositors.
In an ‘open letter’ signed by Imesh Abeywickrema and Asanga Wijewardena, Presidents of the two unions, employees say efforts are being made to drag the Ceylinco Insurance Employee Share Ownership Trust to the GK issue and “rob the entitlements of thousands of employees of Ceylinco Insurance and their families”.
“Since its inception, Ceylinco Insurance had nothing to do with the Golden key Credit Card Company,” the letter released to the media by the PR agency that represents the company, said.
Ceylinco Insurance is a well regulated company listed in the Colombo Stock Exchange and the contribution of its employees were and continue to be vital to elevate the company to its present status as the market leader in the insurance industry in Sri Lanka. “They were encouraged by the fact that they are shareholders of the company through the CIESOT scheme,” the letter said.
CIESOT (Ceylinco Insurance Employees Share Ownership Trust) is a fund that was created in 2000 only for the purpose of managing the shares owned by the employees of Ceylinco Insurance. Hence CIESOT does not have any ownership of any shares and non of the trustees own any shares either.
CIESOT is governed by a trust deed prepared in line with the Trust Ordinance and this deed was registered in the land registry on the17th August 2000. Prior to the establishment of the Trust, the approval of the then Controller of Insurance was obtained and the Colombo Stock Exchange was also informed.
The letter said Lalith Kotelawala was appointed as a trustee of CIESOT in his capacity as the then Chairman of Ceylinco Insurance and this does not mean that he owns any of the shares managed by CIESOT. “Further, he has not been enjoying any dividends as a trustee and no other benefits were given to him at any stage,” it said adding that the role of the board of directors of CIESOT was to perform the administrative functions related to the Trust on behalf of the beneficiaries who are the employees. Shares are owned solely by the employees of Ceylinco Insurance and the purpose of formulating this scheme was to reward employee loyalty and accordingly employees were given dividends every year.
“Similar employee share ownership schemes are in operation in several corporate entities. The employee share ownership scheme of Seylan Bank is identical to that of Ceylinco Insurance as both schemes were established under the same guidelines. When the GK issue erupted, the authorities strongly said that employee shares of Seylan Bank cannot be touched as the shares are owned by the employees. We cannot understand as to how the employee share trust of Ceylinco Insurance is vulnerable and not the trust of Seylan Bank as the only difference is that Seylan uses a ‘S’ and is called SESOT instead of the ‘CI’ of Ceylinco Insurance,” the letter noted.
Moreover, five of the former GK directors still perform their duties as Trusties of the SESOT of Seylan Bank.
The letter said that by destabilising a corporate entity such as Ceylinco Insurance, “what would be the signal we give to the potential investors and the capital markets? What is the agenda behind this move? Isn’t it an effort by some unscrupulous individuals acting for personal gain and the end result would be ‘robbing Peter and paying Paul’?”
The unions urged the authorities not to destabilise the mindset of the employees of this “great company which has done a yeoman service to its over three million customers for a period spanning two and a half decades”.