Saga of the depositors of failed companies

a) During the period around 2009, 2010 and 2011, the fall of several finance companies registered with the Central Bank of Sri Lanka (CB) were discreetly reported, with a cover-up strategy of a series of restructuring concepts. b) These finance companies had absolutely no relationship to the collapse of the Pramuka Bank or the crash of the Golden Key company. GK was not a registered finance company with the CB. c) In fact the public were vigorously canvassed to deposit their savings in these registered finance companies by the regulator - the CB - through the public media. d) While the overall savings and fixed deposit interest rates offered by the registered finance companies were reasonably attractive and were specifically monitored by the regulator, as per the Finance Companies Act No. 78 of 1988, the innocent public placed their valued savings, in savings /fixed deposits of these finance companies. e) My deposits in savings and fixed deposits were placed accordingly with Ceylinco Investment and Reality Ltd now known as The Standard Credit Finance Ltd in 2008. These deposits represent the total EPF funds received by me from the CB during the same period. f) Within a short period of time, the depositors were shocked to note that the servicing of their deposits were terminated on the pretext of a mammoth fall of the finance companies mainly due to the crash of the Golden Key company. (This reason was found to be absolutely false, subsequently). g) Nevertheless, the depositors were provided with numerous restructuring programmes with the appointment of Managing Agents who were wizards in the finance industry. These restructuring programmes vouched the complete safety of the deposits and the accrued benefits on par with the contracts. The depositors were duped to accept same as they were fully backed by the regulator - CB. h)However, by 2011, the Action Team of the Depositors, of the Standard Credit, found out from the reports published and filed by the company auditors, that ( 1) the company had craftily delayed the submission of accounts for the years 2008/09 and 2009/10 for the Audit, ( 2) the auditors refused to express an opinion on the accounts of 2009/10, due to a series of lapses, in terms of the accounting standards prescribed, for companies operating in Sri Lanka, (3) the said audits revealed significant misstatements of the liquidity position and obligations to depositors, due to a lack of financial controls within the company, (4) a massive variance of Rs. 265,694,017 was highlighted, as unreconciled balance of depositors funds, in the 2008/ 09 accounts, (5) the company has been unable to fulfill requirements of directions issued by the CB, (6) the company has accepted Rs.53,400,000 in the form of Promissory Notes from the public, in violation of the procedure laid down by the CB, (7) compliance requirements of Companies Act No.7 of 2007, in respect of filing returns & maintenance of registers have been violated, ( 8) stocks and debtors amounting to Rs.506,648,097 had been written-off during the year 2009/10, due to the non availability of account reconciliations and accurate identification of asset balances. These accounts have been approved and signed by Company Chairman Sanka R. Wijesinghe and Executive Director Hiran Gunasekera. i) The most discriminating situation was, the erosion of total assets of the company by Rs.2,239,561,668, between the period 1st April, 2008 and 31st March, 2010 (two years). On the other hand, a major portion of the additional Rs.2,129,705,110 brought in by the depositors during such period has been craftily misappropriated by the directorate of the company. j) The reports also highlighted the fact that an alternate company by the name of Ceylinco International and Reality Ltd abbreviated as "CIRL without the Central Bank registration of a finance company, has been accepting deposits and even promissory notes, operating within the four walls of Ceylinco Investments and Reality Ltd. k) The audit reports also disclosed that the deposits placed in the alternate company - Ceylinco International, has been settled through the assets of the original "CIRL" company, in which we have placed our valued deposits and the outstanding liability thus, created too, has been fraudulently written off as bad debts. l) Our humanitarian question is why the CB (the previous administration) did not take the action prescribed in the Finance Companies Act No. 78 of 1988 or The Finance Business Act No. 42 of 2011, specially against the directors of the company, and recovered the total losses, that they have apparently robbed during a period of two years, as highlighted above. m) We also reliably understand that some of these Executive Directors who have to be held responsible for the losses of the company, are claiming gratuity, having clear evidence with established Audit Reports of theft and misappropriation of funds of the Standard Credit Finance Ltd. n)While billions of rupees were being permitted to erode in the hands of the directors of the company, the then hierarchy of the CB, introduced a killer- restructuring product, in the form of converting deposits into shares of the company. It is worth investigating, as to how a company non-listed in the stock exchange was prompted to transform a major part of its deposit liability status to shareholding status. The bait was the possibility of trading the shares in the stock market and recovering the investment possibly with a profit attached to it. Those who accepted this theory little realised that the said recovery would be possible only after the company gets listed in the stock exchange which too requires the achievement of minimum qualifying criteria. The then cosy directorates and the Managing Agents duped the depositors with a rosy environment towards selling this transformation concept. In fact, monetary benefits too were freely channeled towards effecting the transfer of deposits to shares in regard to many depositors. Originally the so converted shares were to possess the "Non- Voting" rights. However after the motivated depositors became co-owners of the company, the said "Non-Voting" status got shifted to "Voting" status. Six to seven years have passed and now the so called co- owners of Standard Credit Finance Ltd are fully fledged, prestigious shareholders, minus of not being able to trade their shares, as the company is not listed yet. Most of them enjoyed refunds of part of their deposits, as promotional dividends towards the conversion, being an outflow of valuable funds of the Standard Credit Finance Ltd. They have therefore, got a two-fold consid- eration for their investment. Thus is the difference between the deposit converted shareholders and the "raw depositors" who continue to suffer, the consequences of ''master minded financial wizards". The late Mr. Moraes, along with those names mentioned in Quintus Perera's article on Page 9 of May 14 of the Business Times fall into this privileged group of shareholders while the respected "Yahapalana Government" as well as the present administration of the CB, should find an immediate process, to compensate fully, the innocent depositors, who have been subjected to abnormal economic suffocation, due to no fault of theirs. o) We urge the state and the present administration of the CB, to change the ad hoc measures adopted by the previous regime, clearly with an intention of forcefully robbing the valued savings of the innocent and aged depositors, which in no uncertain terms, represent an absolute violation of fundamental rights of the respectful citizens. p) We in Sri Lanka are presently in a competitive global age, anxiously awaiting, investments and investors, to form part of our economy. In line with the same it is of paramount importance to project a clean and fair finance administrative environment through the banking and finance company sector. This could be achieved, only if the state positively clears the backlog of financial misdeeds to its own citizens. Our fervent appeal to the media and the Business Times is that - when Maxi Leonard composed and sang Kussi Amma Sera and when the national Baila legend - Wally Bastianz sang Kussi Amma Sera, they were fully aware of the conspiracy or the musical confusion created by Perera and Livera. On the same lines, we too are now aware of the combined attacks on the innocents by the financial wizards, both in the private and public sector.

May we be free of such ' Historical Camouflage' so that we and our families could be sincere contributors towards a successful and prosperous MOTHER LANKA. Amal Fernando (Determined Depositor of The Standard Credit Finance Ltd )

Saga of the depositors of failed companies The Finance and Guarantee (Property Developers) and (Real Estate) companies have been two subsidiary companies of the Ceylinco Group under the chairmanship of Lalith Kotelawala.

We, the depositors of these two companies have invested our hard-earned monies in these two companies in the hope of getting a return to have a decent life without being a burden on our children or any others.

During the tenure of the previous governments, these two companies were malfunctioning and the depositors were not given the interest on their investments for the last 10 years or so. A Trust was formed headed by . C.

Mayadunne, a retired Auditor General and included a retired Chief Valuer, retired banker and a chartered accountant.

They were receiving Rs. 25,000 per sitting having had four sittings for a month for more than three years in addition to other perks. They have prepared the assets registers valuing the properties at more than Rs. 6 billion.

Thereafter for the second time some depositors got together and formed an association and through a Supreme Court order took over the management of the two companies and sadly misused the monies of the depositors without any transparency in their activities. For years depositors didn't receive a single cent.

After a few years, for the third time another set of depositors formed into another association and took over the management headed by retired Brigadier Ranjan Silva through a Supreme Court order. He brought some alternative suggestions with a link with the Union Bank and he too was trying to hoodwink the depositors without giving the actual plan of repayment.

As he was not showing any genuine transparent plan, he was chased out from the president's position of this association at a meeting held at the Public Library and one Mr. Tissera appointed as the president as the fourth group.

He was managing for few years with some others of his choice without informing the depositors what they were doing. None of the depositors other than those close to them knew what was happening. There was no transparency whatsoever of their activities for few years.

The fifth group of so-called depositors headed by one Upali Rajapaksha, Caldera, Wijesuriya, Ashley Wilathgamuwa and some others got together and took over the management of the two companies through a Supreme Court order and paid off 10 per cent of those depositors of Rs.250,000 and less. Here too there was no transparency in their activities with the depositors as to the rest of the plans of paying off the depositors' monies. It is now learnt that they too have been removed and another group (the sixth association) with Brigadier Silva (who was removed earlier), a retired judge, Mr.

Katuwawala (a former trustee) and some others have taken over the management of the two companies.

Thus those who toiled hard with their sweat and saved money to lead a decent life without being a burden on others during the last days of their lives are being plundered by fellow depositors. Where is the fairness in the law in our country?

There were other finance companies which were defunct and have been granted financial assistance from the Central Bank by the Finance Minister and paid off the depositors such as Golden Key, etc. Why can't the Government extend the same opportunity to the F&G depositors and redress them at least those who are at their last days in their lives, say above 70 years of age.

We trust President Maithripala Sirisena will at least look into our fate at this last stage and grant redress utilising our own assets from those unscrupulous elements.