CB to manage two crisis-hit EAP finance companies

The Central Bank ( CB) has stepped in to temporarily take over the affairs of two crisis- hit finance companies - ETI Finance Ltd and Swarnamahal Financial Services PLC. In decisions taken on January 1 at a meeting of the CB’s Monetary Board, the CB is to appoint a panel to manage the affairs of both companies; restrict the withdrawal of maturing deposits and renew such deposits for a period of six months; and pay interest due for deposits as per agreed terms and conditions.

These steps, which are effective immediately, were taken considering the “weak financial performances” of the two companies and “to safeguard the interests of the depositors and other creditors of the two companies, and to ensure safety and soundness of the financial system”.

The CB statement to the media also said that the companies can finalize the negotiations with the prospective investors which the CB will facilitate.

“Depositors of the above two companies are further informed that the Central Bank is taking further measures and closely monitoring the operations of the companies to protect the rights of the depositors and therefore, the depositors are kindly requested to cooperate with the Central Bank in its effort to ensure the stability of the two companies. The depositors may contact the Department of Supervision on Non- Bank Financial Institutions of the Central Bank,” it said.

The two companies have been struggling for a while. The Sunday Times on December 31 reported that the CB has asked the Bank of Ceylon to be the managing agent for these ( two) financial arms of the EAP Group.

The report said the other businesses of EAP Holdings– including its broadcast and media arms are up for sale adding that a Malaysian businessman ne g o t i at i n g on behalf of a Singaporean company to buy EAP Group businesses was detained with three others at the Bandaranaike International Airport (BIA) last month while attempting to smuggle out foreign currency.

to safeguard the interests of the depositors and other creditors of the two companies, and to ensure safety and soundness of the financial system