Government faced with GK assets sale after settling depositors money
After almost eight years of dreadful suffering, Golden Key (GK) depositors with deposits of Rs.10 million can breathe a sigh of relief with the government’s decision to repay the 3rd and final tranche of the 41 per cent repayment of their total deposits partially ending the money swindling saga of Lalith Kotelawala and his clan.
However the Treasury along with the Central Bank is still confronted with a major task of recovering the sum of over Rs. 8 billion public money allocated for this repayment process on the directive of the cabinet of ministers by disposing now available assets of the defunct credit card company.
The repayment process comes to an end with the cabinet decision to release Rs. 4.05 billion from the Treasury to the Central Bank for the completion of the 3rd and final tranche.
Some 460 GK depositors with deposits of over Rs.10 million will receive 41 per cent of their total deposits under the payment plan proposed by Finance Minister Ravi Karunanayake in consensus with members of depositors associations last year.
Cabinet approval has been given to take early steps to dispose the assets of GK and its subsidiaries in terms of the law and to credit the proceeds of the disposal of assets to the Treasury.
The Treasury had earlier allocated Rs. 544.3 million rupees to pay the first tranche for 2200 depositors with less than Rs.1 million deposits and also allocated Rs. 3.9 billion to pay the second tranche for 5000 depositors with Rs.2-10 million deposits as per the Supreme Court decision.
But the repayment of the third tranche scheduled on or before August 3 was delayed due to financial constraints at the Treasury, official sources said adding that the disposal of GK assets should be expedited to reimburse the public money being paid to GK depositors.
On July 24 last year, addressing the launch ceremony of the repayment process, President Maithripala Sirisena pledged to appoint a special investigation commission chaired by a retired judge to probe the transactions in the GK before and after its collapse in December 2009 and take legal action against those who have misappropriated money and assets of the company.
While this commission is yet to be appointed, disgruntled depositors and civil society activists say such a commission is essential because the large scale dealings in transferring ownership of GK’s subsidiary companies and valuable assets including land and property took place during the previous regime,
This fraudulent practice had been carried out under the cover of appointing management agents and other underhand methods including the introduction of the Revival of Underperforming Enterprises and Underutilised Assets Act in 2011 by the Rajapaksa regime, they alleged.
At that time of the GK collapse, the Attorney General informed Court that Rs. 14 billion of the deposit money of Rs.26 billion had been misappropriated, Rs.5 billion has gone missing, Rs.1 billion had been used for illegal payments and Rs.6 billion invested in related companies.
This shows the magnitude of the unethical practices of the company management, GK depositors’ lawyers said.
Even in the aftermath of the GK collapse, there was no transparency in transferring the management of GK subsidiary companies and other financial dealings, they alleged.
The ill-effects of those transactions will gradually come into light with another financial and economic crisis of a different magnitude in the near future, an economic analyst told the Business Times,