Failed CIFL: New investor proposed but depositors wary

Depositors at the failed Central Finance and Investment Ltd (CIFL) are still wary of investors being brought in, even with Central Bank (CB) sanction, because they have been let down many times in the past.
These were the sentiments that emerged at the 4th Annual General meeting of the CIFL Depositors Association (CIFLDA) at the Colombo Public Library hall on Saturday, August 19, which also discussed a proposal received from the CB in which a Swiss company has expressed interest in investing and taking over the collapsed finance company.
While the depositors unanimously approved a resolution backing the proposal, some depositors – who reluctantly approved the plan - also expressed their reservations over whether they could trust and have faith in such initiatives by the CB and the Government given the experience in the past.
While the Swiss company has proposed to initially invest Rs.1.1 billion, its repayment plan presented by association president, W. Gunawardena to depositors was also spelled out at the meeting. The plan provides for 15 per cent of a deposit to be paid within three months after the new company is established. By March 21, 2018 another 10 per cent is to be paid and within April 1, 2018 and March 31, 2019 another 10 per cent will be paid. 
Further, between April 1 and September 30, 2019 another 15 per cent will be paid which then totals 50 per cent of the total deposit. 
The investor is offering 8 per cent interest for the balance 50 per cent and expects to pay off the entire deposit within by 3 ½ to four years’ time from the time the company is floated. The CB had requested association officials to discuss the proposal with members and report back on the response.
Several depositors spoke to the Business Times on the sidelines of the AGM. Some were confident of the while others expressed their serious concern over the delay by the Government and the CB in resolving their issues, saying “people are dying unable to meet their medical expenses and some are also committing suicide unable to meet their essential encumbrances”.
Some of these concerned depositors are widows who said they are facing a major problem of giving their daughters in marriage due to the lack of cash to offer as dowry.  
Among them, Ms. Hema Jayasinghe, Seeduwa a widow with three children, said that they are clueless of what is happening to their money and those who promised good governance have betrayed them leaving them the only option of suicide as they are extremely handicapped in proceeding in life as their total savings are tied up. (QP)