SL depositors of failed financial companies fight back urging new government authorities to deliver
Though promises have been made by the authorities at various times assuring depositors in failed finance companies that they would be settled speedily, nothing concrete has happened even after six years of the first promise. Depositors of these failed units, in some instances, have organised themselves as a group to canvass their case.
CIFL Depositors meeting
In the case of Finance and Guarantee (Developers) and the Finance and Guarantee (Real Estate), the depositors are not properly organised and a different situation seems to be emerging: Some depositors have independently approached the authorities and working to get their (own) deposits back.
This allegation has been made by one of the depositors K W Ruberu who says he has learnt through reliable channels that a few depositors are arranging to get a 10 per cent repayment by October and another 50 per cent in December, with the approval of the Central Bank (CB).
He says while the asset value of these two companies is valued at Rs. 4 billion, data shows that it would be more than Rs. 6 billion and the total liability (depositors’ money) is also the same amount. Mr. Ruberu conceded that earlier there was an independent association representing around 2,500 of their members but halfway through it was split and now some of them are left in the lurch, receiving no communication. He said that if they do not get properly organised there are uncertainty as to whether they would get any of their money back. He hoped and pleaded that some of the newly-elected parliamentarians would raise their matter in the legislature.
Meanwhile depositors of another failed finance company -The Standard Finance Co PLC (TSCFL) which collapsed in 2008 with the Ceylinco Crisis – now believe they have been taken for ride by the CB and managing agents Entrust Ltd since though 68 per cent of their deposits have been converted to non-voting shares in March 2011, these shares have not been listed in the Colombo Stock Exchange (CSE) and thus they have not received any returns since then.
They are fighting back, firmly.
A spokesperson of the co-group of the Deposit Protection Society of Standard Credit Finance PLC (DPSSCFL) told the Business Times that in 2009 the CB’s non-banking department had appointed Lankaputhra Co as Managing Agents of TSFCL.
Thereafter on 22 March 2011 Entrust Ltd, owned by Lohan and Chanuka Ratwatte, was appointed the Managing Agent and depositors alleged had used strong arm tactics to subdue the depositors during the previous regime.
In a letter dated 28th August 2015, sent to the CB Governor and copied to President Maithripala Sirisena and Entrust Director Chanuka Ratwatte among others, the DPSSCFL pointed out that in May 2014 the CB and Entrust agreed to infuse Rs. 2.5 billion each and list the shares before end December 2014.
“Entrust Ltd has been procrastinating and giving many excuses on the implementation of the revival plan much to the disappointment of the exhausted depositors. We are giving an ultimatum to both the CBSL and Entrust Ltd, to list our shares, within 3 months of the date of this letter, or go for another solution in line with the plan that was given to Golden Key CC depositors. A written response from both the CBSL and Entrust Ltd within 14 days of receipt of this letter will be much appreciated,” the letter written in strong language said. How such strong language and demands would be perceived by the authorities remains to be seen.