Troubled Entrust sued by a client, others to follow
One client of Entrust Securities PLC (Entrust) has taken the company to courts over non-payment of funds while some others are contemplating the same move, sources said. A former director at a top Colombo firm has sued Entrust for Rs. 100 million in the Colombo High Court. “There are others (clients) who are also planning similar action,” an informed source told the Business Times. This high-riding company, which received lot of backing during the tenure of the former Mahinda Rajapaksa regime, was near collapse unable to pay its debts when the Central Bank (CB) stepped in and took charge last January. At the request of the CB, it is now under the temporary management of the National Savings Bank (NSB) until all debts are paid.
The CB which separately contracted forensic accountants and corporate lawyers to expedite the Entrust probe in addition to handing the ‘Entrust files’ pertaining to irregularities at this primary market dealer, has requested all commercial banks for details of accounts of some Entrust directors, he said. The Police Financial Crimes Investigation Department (FCID) is planning to file action against involved officials, according to him. Allegations by certain company officials on wasting funds by the company in sponsoring ‘unprofitable’ events like rugby, tennis, horse racing, dances, etc as well as costly travelling by helicopters was brought to the notice of CB by some staff. ”In addition the company sponsored rugby club Carlton-Western Warriors for a huge fee. They formed many other, new companies and transferred money to these new companies,” a former employee said.