Financial Times

Depositors panic after Central Bank warning

By Quintus Perera

The owner of an unregistered finance company at Battaramulla that crashed after a run on deposits is believed to have gone abroad.

The main office of Sedent Finance Co. at Pelawatte Junction and a house nearby used as an extra office were closed and deserted last week as police continued investigations on three complaints by depositors. A three-wheel taxi driver near the premises told The Sunday Times that since the sudden closure of the company, about two weeks ago, more than 200 depositors have come and inquired about their money.

Some depositors have invested in the range of Rs. 500 to Rs. 2,000. A few old women wept on seeing the office closed, he said. Other residents said depositors panicked and began withdrawing their money after a Central Bank statement listing the names of registered finance companies was issued and warned depositors to be wary of unregistered ones.

Police Inspector R.K.B.S. Wijewardena of the Mirihana Police said they discovered the Sedent main office had closed only after the Galle agent of the firm reported that the Galle branch had been shut.

The value of the deposits on the complaints already received is estimated at Rs. 1 million.

Police visited the residence of Sedent Managing Director, Sisira Navaratne in Gampaha but couldn't trace him. His wife was unaware of his whereabouts.