A plan to offer Golden Key (GK) depositors shares in a new investment company was shelved at a meeting on Monday at the Central Bank office between GK directors, depositors, Central Bank authorities and the official committee assigned to dispose GK assets. Disgraced, former Ceylinco Chief Lalith Kotelawela was not present at the meeting though he was expected to attend. Among former GK directors present were Khavan Perera and Ms Padmini Karunanayake.
Depositors had earlier opposed the plan from the Central Bank to offer shares of the proposed GKCC Special Purpose Vehicle Company Ltd (SPV). A senior Central Bank official said that GK depositors vehemently protested against the share issue saying they want full repayment of their lost deposits. This decision will be conveyed to the Supreme Court (SC) on January 27, 2011, the next hearing date of the GK case.
The modalities of the SPV were discussed with the depositors, at the meeting, the first between all parties concerned since the collapse of the company in December 2008. According to the way forward plan prepared by the Central Bank, the Board of Directors comprising three members of the official committee assigned to dispose GK assets, and three representatives of GK depositors, has been mandated to issue new shares for cash or borrow from banks on the strength of their own assets and balance sheet and operate the business on commercial lines to generate a value for GK deposit holders.
GK depositors will become shareholders of the company and they can dispose the shares and recover their investments, the senior Central Bank official said. GK depositors vehemently protested against the share issue saying they want full repayment of their lost deposits.
The parties agreed to transfer all the GK assets to the SPV and sell all realizable assets immediately. A decision was taken to restructure all profitable, subsidiary companies of GK and sell its assets after restructuring. Cash available from sale of companies and assets will be used for repayment of depositors in accordance with the Supreme Court order.
The official committee assigned to dispose GK assets has identified a number of assets belonging to now defunct Golden Key Credit Card Company Ltd (GKCC), its Directors and former Chairman Lalith Kotelawala and Sicille P. C. Kotelawala.
These assets valued at around Rs. 2 billion are to be transferred to the new SPV, a senior Central Bank official said. The company has already been incorporated under the Companies Act as per the Supreme Court order and it will be listed as a public company before the end of this year, a member of the committee told the Business Times.
These assets include Golden Key Eye Hospital, three floors of Ceylinco Limited, IT companies –Blue Chip Customer Engineering Lanka (Pvt) Ltd, M-net (Pvt) Ltd , Asia 400 (Pvt)Ltd, Golden Key Company (Australia) (Pvt) Ltd , Ceylinco Hospitals Ltd, Teak Plantation project-Puttalam, Vehicles belong to Golden Key Group, land at Hanwella, Land and machine at Narammala, stocks of Golden Key Motor Company Ltd, Golden Energy Company Ltd, Ceylec Ltd , generators of the Ceylon Services and Suppliers Co Ltd, and shares of Seylan Bank, The Finance Co Plc, Hotel Ceysands,, Blue Diamond Jewellery Worldwide Plc, and Ceylinco Insurance Co Plc .
Golden Key depositors claimed that assets belonging to Lalith Kotelawala, the former Ceylinco chairman and ex directors of GKCC had been undervalued depriving them of their hard-earned savings.
The disposal of such assets, depositors charge will not raise the expected amounts and will leave depositors in a quandary. Depositors also requested the SC that all the money that is due to them – as per the exact amount deposited by each individual with no reduction of the interest- should be ordered to be paid to them . |
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