Uncertain future for grand old TFC depositors
The spillover effect of the liquidity crisis in the Ceylinco group with the collapse of Golden Key Company 11 years ago in 2008, is now being felt by the 80 year-old, The Finance Company (TFC), after crossing Rs.25 billion mark in public deposits.
TFC has called expressions of interest for potential investors to inject Rs. 25 billion in capital to the collapsed firm.
The company in a market disclosure said its board on December 31 decided to call for credible expressions of interest from both local and foreign investors.
The Central Bank in October issued a notice of cancellation of TFC’s license but provided time to the firm to attract an investor.
TFC has not found any credible investor to revive the company which is incurring a loss of around Rs. 200 million monthly.
Having realised the difficulty in finding a suitable investor under the present political and economic situation in the country, depositors have demanded the government’s intervention to repay their deposits or resurrect the company by infusing fresh capital.
Hundreds of disgruntled TFC depositors on Wednesday staged a protest in front of the Gangarama temple Seema Malaka in Colombo demanding a return of their deposits stuck in the accounts under Central Bank restrictions.
Around 800 depositors, including women, raised placards and chanted slogans urging the Prime Minister (PM) who is also the Finance Minister to solve TFC liquidity crisis with Central Bank intervention.
The presence of police personnel prevented the peaceful protestors from marching towards Temple Trees, the PM’s official residence, to stage a picketing there.
Convener of the protest demonstration George Weragoda said that they had to resort to a picketing campaign as their talks with senior officials of the Prime Minister’s office failed to find a redress for depositors.
He told the gathering of around 800 depositors that the pledge given by those officials to a group of depositors to settle their grievances as soon as possible after the discussions couple of weeks ago is still to be materialised.
The Central Bank said the operation of the company in this ad hoc manner will be further detrimental to the interest of the depositors and other stakeholders.
The Monetary Board of the Central Bank having considered the weak financial performances of TFC took a number of regulatory actions under the provisions with effect February 15, 2019.
The aim is to safeguard the interests of the depositors and other stakeholders of the company.
The regulatory measures included suspension of accepting new deposits, withdrawal of deposits and disbursement of loans and advances to facilitate the restructuring process of TFC.
The primary objective of the regulatory actions was to identify a potential investor for TFC within a reasonable time period. However, TFC has not been able to find an acceptable investor to date to revive the company, the bank said.