Desperate depositors now claim human rights violations in plea to HRC
Sri Lanka’s Human Rights Commission (HRC) and the diplomatic corps appear to be the only salvation for a group of mostly, elderly depositors whose appeals and pleas for a return of their money – from one of the many failed finance companies – have not succeeded, so far. Helpless depositors of the failed Standard Credit Finance Co (TSCFC) whose pleas for relief to get their capital and interest since 2008 haven’t succeeded – even under a new government – recently lodged a complaint against the Central Bank (CB) with the HRC last week and again on Tuesday visited the commission office for an update on their complaint.
The complaint said that the CB Monetary Board deceived them by converting 68 per cent of their deposits into shares that has so far yielded nothing. The CB entrusted TSCFC management to Entrust Ltd (in which Chanuka Ratwatte was ‘powerfully’ involved earlier), which is now investigated on fraudulent embezzlement of massive funds of subsidiary companies and the withdrawal of Rs. 2.5 billion – another fraudulent embezzlement. The depositors point out that it is their collective view that if this large sum of money infused into Entrust in September 2014 as Treasury Bills and pledged as collateral for a one-to-one loan from CB by the previous regime had been properly safeguarded and retained in the joint custody of CB it would have remained in the company even today.
With these funds they say the full liability of all the depositors amounting to around Rs. 1.91 billion could have been met. Depositors query as to how the former directors of TSCFC took back their investment without the knowledge and/or written approval of the CB – a matter of carelessness and/or convenience – a matter that has to be taken serious cognizance and demands investigation. Depositors say that they were informed of the investor interest last month by Udeni Alawattage, CB Director, Department of Supervision of Non-Banking Financial Institutions and Prof Hareendra Dissabandara, Chairman TSCFC. They were informed that the exercise could be completed by one week to 10 days. But they complain that they are now back at ‘square one’ awaiting a definite investor response.
The three alternative options suggested to bail-out the company are: (New) investor coming in; CB provides financial assistance from the Sri Lanka Deposit Insurance and Liquidity Support Scheme or the Government apportions a suitable amount of money for the mostly senior citizens to live at peace for their remaining few years.They complained that this CB Support Scheme is formed with compulsory contributions from banks and NBFI’s and this fund as at 31 December 2015 stands at Rs. 25.7 billion with the annual contribution being Rs. 5.9 billion. They suggest a grant of Rs. 1 billion from the fund could help TSCFC recover.
They point out that such a loan of Rs. 5 billion was granted to The Finance in 2014. They allege that the CB DSNBFI officials and the present Chairman, TSCFC mislead the depositors saying that the former directors of TSCFC did not make investments to the company as the audit report by Ernst & Young indicated that a sum of Rs. 2,586,426,910 is listed as Financial Investment on 31 March 2015. The statement was certified as correct by the Chief Financial Officer of E & Y. Depositors say they have high hopes that the new CB Governor would resolve this long outstanding issue. Depositors told the Business Times that they also intend meeting Western diplomats to brief them on their plight.