Nation Lanka Finance Company (NLF)’s private placement action aimed at infusing capital worth Rs.500 million through a consortium of investors is now hanging in the balance owing to undue interference of a former director of the collapsed Golden Key Credit Card Company (GKCC), NLF sources said.
Bandula Ranawera, one of the accused in the Golden Key fraud case and a former director of collapsed Golden Key Company, continues to serve as the Managing Director of NLF despite the Supreme Court order that no GKCC director can work as a director of any public deposit taking company or institution, and is opposing the rescue plan of private placement for which Central Bank of Sri Lanka, Colombo Stock Exchange and Securities Exchange Commission of Sri Lanka have given their approval, sources revealed. Mr Ranaweera along with some other directors were planning to defeat the resolution seeking approval of the private placement at the company’s Extraordinary General Meeting (EGM) to be held next week, the sources said.
NLF has mobilized over Rs. 2 billion public deposits and now has a negative net worth value of Rs. 380 million.
It has declared a serious loss of capital in July 2010 and now find difficulties to pay public deposit holders. As a remedial action the company approached several prospective investors including LOLC and Union Bank for a capital infusion, but proposals were turned down eventually. Finally a consortium of investors led by Investor Access Equities (Pvt) Ltd came to the rescue of the company by infusing capital worth Rs. 500 million through a private placement.
Directors including Mr Ranaweera and Finance Director Chandra Gamage had signed an agreement with the consortium of investors on 14th December 2010 giving their consent. Now they are opposing the move without any valid reason, employees of the company allege.
Meanwhile it has been revealed that in the GK case, Mr Ranaweera’s asset declaration given to the Attorney General and Supreme Court was also bogus misleading the judiciary and the depositors. According to his asset declaration, he has also failed to declare that he has 1.7 million shares of Nation Lanka Finance which is now worth Rs. 40 million and convertible to cash immediately and could be paid to GK depositors immediately.
He has not declared his estate of 50 acres owned in Katukenda estate, Badalgama now worth Rs.400 million. His property at No 133/20 at Nawala Road, Narahenpita now worth over Rs. 50 million in the asset schedule given to the Supreme Court and there are 13 items which belong to him and his family members which is valued over Rs. 300 million showing as “not known” and another six items as “not given”. These remarks “not known and not given” by him is to mislead the courts and avoid declaration of assets, NLF employees said. Mr Ranaweera was not available for comment.
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