Depositors of other failed finance Cos. should also be paid – Letter
View(s):Although the recent payments by the Central Bank (CB) to unlucky depositors of the Golden Key (GK) Co up to 41 per cent of their deposits after nearly eight years, reported in your columns last week, is to be appreciated it raises a legitimate question as to which category of depositors should have been given priority in the repayment scheme.
Depositors of failed finance companies registered with the CB who are covered under a separate insurance scheme should have received priority over those in the GK which was not a registered finance institution but a Ponzi scheme. I am aware of the case of a very old medical practitioner who had Rs. 5 million deposited in the CIFL Finance Co which he could not recover even in part before he migrated to be with his loved ones abroad. When he tried to interview a director of this company the latter refused to come down to meet him. He was too old to go up the stair way to meet the director.
It could be that the government hopes to recover at least half the pay back amount in the way of taxes and penalties under the Inland Revenue law from the GK depositors. Whatever the case be the CB is getting things topsy-turvy as it happened in the February 27th Bond Issue.
We only hope that the perverse attitude of the CB will not have a negative effect on the parties bent on restoring “Yahapalanaya”. The President’s appointment of a Commission of Inquiry to examine the GK episode is timely as those in the top echelons of the previous regime had dirtied their hands to the point of liquidation of GK.
Dr. Leo Fernando
Pelawatte