News
Central Bank steps in again, takes over Golden Key payments
Desperate depositors of the Golden Key (GK) company were this week once again offered a new payment plan process by the Central Bank (CB), probably the third time since the disgraced credit card company collapsed in 2008.
The new plan of action was discussed on Friday at a meeting presided over by CB Governor Arjuna Mahendran with a group of 21 depositors and members of GK including Dushyanthi Hapugoda, Wasantha Gunathilake, Marco Perera, Roshan Fernando, Malcolm De Silva, Anura Gunawardena, Prasanna Hennayake and Sunil Abeyratne. On an earlier occasion, Mr. Mahendran told the Sunday Times that the regulator would step in to expedite the payment process and also ascertain whether those involved in the collapse should be punished.
At the meeting, the representatives of GK depositors gave their approval to this new initiative which will be implemented with the consent of the Supreme Court.
Mr. Mahendran told the Sunday Times that the CB will take over the management of the court-appointed GK company and all its subsidiaries and liquid assets following a comprehensive audit.
He said that when he asked representatives of GK as to whether they agree or not to the intervention of the Central Bank to find a redress for depositors, they had agreed to it.
The GK company will be acquired by the CB and managed separately with the consent of the Supreme Court while a comprehensive audit will be carried out on past and present functions as well as assets and liabilities, he revealed.
The present board of directors will cease to operate after CB takes over, he added.
GK depositors who attended the meeting told the Sunday Times that they fully endorsed the CB Governor’s plan.
GK depositor, Alex Jayasinghe who was present at the meeting, said they have full confidence in the new Central Bank Governor adding that the previous board of directors of the court-appointed GK company had failed to fulfill their task and breached the trust bestowed upon them. The court appointed company had made 3 to 4 payments to depositors.
Another GK depositor Anura Gunawardena noted that he brought to the notice of the Governor about various irregularities and misuse of GK money by the present management including payments made to directors exceeding the amount stipulated by the Supreme Court.
Dushyanthi Hapugoda, a depositor and a GK director, told the Sunday Times that they fulfilled the task entrusted to them with commitment.
She said that they are ready to extend their support to the Central Bank to make the repayment process a success.
GK Chief Executive Officer (CEO) Dinesh Perera said they had paid a total of Rs.2.1 billion to depositors under four phases of the previous action plan devised by the Central Bank.
The failed GK credit company had over 9,000 depositors and a deposit base of Rs. 26.5 billion when it crashed in 2008. It had been paying a lucrative interest of 16 per cent and over and even 35 per cent for selected depositors on a peculiar credit card scheme where available balances accumulated interest.
Cases pertaining to the company are pending in the Supreme Court, High Court and Colombo Commercial court. The orders relating to payment plans or depositors were given by the Supreme Court hearing the FR case.
The crash caused a lot of heartburn to many investors. Nearly 100 depositors have died since the collapse and 23 have committed suicide as they waited for the payments.