Six troubled finance companies to be bailed out
Six troubled finance firms which can’t keep their head above water are being negotiated for bail-outs by several investors and among them the former Entrust-managed Multi Finance tops the list, according to Central Bank officials. The Central Bank (CB) is evaluating proposals to resurrect the Entrust subsidiary and is close to finalise a potential investor and to bring in new owners to this firm, they said. ”Multi Finance has submitted proposals by prospective parties,” a senior CB official told the Business Times adding that they are evaluating these. Apart from this there are five more finance firms that are being discussed, he said. He said that there are both local parties and foreign parties that have pitched for Multi Finance with local partners but declined to say how many.
He said that Multi Finance, a new company with a moderate deposit base has attracted some firms that are growing inorganically. “We’re running it through the CB Monetary Board and once they sanction a suitable proposal, we will announce it.” Entrust, part of the Ceylinco Group (at the time Ceylinco Sriram) which collapsed in 2008, is being investigated over irregularities by the CID and the Police with Central Bank (CB) carrying out their own probes. Entrust’s subsidiary Entrust Securities was taken over by the CB in January this year and its management given to the National Saving Bank after its assets fell below liabilities putting depositors and investors at risk.