Valiant struggle to restore lost deposits of F&G continues
Depositors of the failed F&G (Finance and Guarantee) Property Developers (Pvt) Ltd and F&G Real Estate Co Ltd (F&GRECL) numbering around 5,000, have been fighting a losing battle for the last 10 years to get their deposits back amounting to Rs. 7 billon.
Though boards of directors have been appointed to continue the work of the two companies, there is little these directors have done so far except for faithfully pocketing their remuneration over the years, according to desperate depositors.
Several struggling depositors recently got together and arranged a meeting to discuss an investor proposal where the investor is prepared to invest Rs 1.5 billion in the two companies in three investments at the rate of Rs. 500 million each, according to the Action Plan of the Central Bank, approved by the Supreme Court (SC).
There are two depositors’ protection associations – Independent Depositors Society and the Depositors Society. Recently a group of about 25 of these depositors grouped together and six of them met the Chairman of the F&G and obtained permission to hold a depositors meeting to discuss the investor’s proposal to resurrect the company and pay back the depositors’ dues.
The six are Saman Wijesekera, Roshan Peiris, Tissa Dassanayake, Ms. Swarna Abeysekera, Ms. Leela Ariyadasa and Chandra Dharashana.
The investor – Duminda Mayadunne – is involved in property development and the capital market. Mr. Wijesekera, heading the group of six depositors, told the depositors gathered at the Colombo Public Library recently that this proposal has already been submitted to the SC, where the court is hearing the depositors’ Fundamental Rights (FR) case.
He told the Business Times that the SC has asked the proposed investor to submit certain additional documents.
Mr. Wijesekera told the depositors that the investor has decided to initially invest Rs. 500 million in two companies and later another two investments of Rs. 500 million each. The depositor payment plan is according to the SC-approved Central Bank Action Plan. Within 15 months 50 per cent of the depositors of the F & G Property developers (Pvt) Ltd and 50 per cent of 61 per cent of the depositors of the F & G Real Estate Co Ltd is to be paid.
According to the plan the balance 50 per cent would be paid with the following 9 months. The balance deposits would be converted into non-voting shares.
He said that then the investor would operate the two companies along with their subsidiaries and would continue to pay the depositors strictly according to the Plan of Action submitted by the Central Bank and approved by the SC.
He told the gathering that both the depositors’ protection societies have given their blessings for their efforts in promoting the new investment and they expect the SC to take this investor plan up when the case resumes on March 8.
He said that the SC resumed the hearing of the FR case on February 22, Chairman F&G, Brig. (Rtd) Ranjan de Silva had submitted to court another investor proposal signed by him only and there was no approval of the Board of Directors of the company. The SC has indicated that at least there should be three signatures of the Board. Brig. de Silva’s proposal contained the assets valued in 2012 but SC noted that these assets should reflect the present value.
He said that after the depositors meeting at the public library, around 25 members of the depositors’ protection associations met the investor and further discussed with him about his investment proposal and these members were able to clear their doubts of the plan.
Mr. Wijesekera said the two depositors’ protection organisations are hopefully coming onto a common platform to fight their battles and initially support the present investor proposal. They have instructed their lawyers appearing for the two associations to support the investor proposal in courts.
Only three members of the board including the Chairman, attends the board meeting, Mr. Wijesekera alleged and indicated that the two other members of the board are not permanently attending the board meetings in protest of the board decision to increase their payments for sitting at board meetings to Rs. 75,000 per meeting from the earlier Rs. 25,000.
Lawyers of the two depositors’ protection associations as well as the lawyers appearing for the respondent objected to Brig. de Silva’s investment proposal.