F&G Property Developers (Pvt) Ltd have hoodwinked depositors by accepting deposits from them as investments for property development projects including “Woodland Residencies” in and around the city of Colombo and issuing them with investment certificates. This transpired recently when the F&G financial fraud case was taken up for hearing before Colombo Fort Magistrate Court.
The company which is not registered as a finance company cannot accept deposits although it has been operating as an unlicensed finance company.
These finance companies, investment banks and other, financial institutions were paying very high unrealistic interest rates which led to their insolvency and put depositors in to difficulty. A senior Central Bank Official told the Sunday Times FT that they have warned the public to be cautious in investing their money in institutions which are not supervised by the Central Bank.
The company has accepted deposits amounting to around Rs..2.39 billion to be invested in “Woodland Residencies” housing scheme, one of their property development projects, on a 90 perch block of land in Moratuwa owned by Ceylinco Group and F&G Group Chairman Lalith Kotelawala.
Construction work of the housing scheme commenced on February 26, 2008 but there hasn’t been any progress since then, sources from the Attorney General’s Department said.
The company has issued investment certificates to depositors giving them an assurance that their money will be re-paid after selling the houses that will be built at “Woodland Residencies”. However this money was not utilized in the proposed housing project, the sources said adding that the construction work at the site was halted after a few months of its commencement.
Deputy Solicitor General Yasantha Kodagoda has brought to the notice of Colombo Fort Magistrate Court that the certificates issued to the depositors indicate the name of the depositor, the date of the deposit made and the name of the venture to which the deposit was utilized.
According to the deposit certificates the deposits were to be utilized for various projects such as the Country Housing Project, Majestic Apartments, Continental Residencies and Regency Apartments and Woodland Residencies.
He submitted that the work of some of those apartments had been completed long before the company concerned accepted the deposits and misled depositors saying that the company was investing such monies in the stated ventures. This is an act done with mala fide intentions to deceive the depositors, said Mr Kodagoda.
Therefore the company by utilising the deposited monies in other ventures which the depositors were unaware of and had not authorized, had thereby committed a fraud, he said.
He also submitted that the directors had utilized the deposits for personal use and to fulfill their personal goals. By the end of March 31, 1998 the total value of the deposits of F&G Property Developers (Pvt) Ltd was Rs. 3.9 billion. By the time the investigations commenced earlier this year the total value of the deposits had arisen to Rs. 4.362 billion. |
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