Former Auditor General resigns as F&G Trust Chairperson

In a new development at the Finance and Guarantee (F&G) Company Trust appointed by the Supreme Court, chairman of the board of trustees, S.E. Mayadunne, a former Auditor General, resigned following the recent Supreme Court finding that the trust has failed to find a redress for over 4,000 hapless depositors, a spokesman for a depositors' group said. Brigadier (Rtd.) Ranjan de Silva, President of the Independent Association of Depositors of F & G Real Estate Co Ltd (F&G RCL) and F&G Property Developers Pvt. (F&G PDL) said this followed the Business Times report last week which highlighted the Supreme Court directive against F&G trustees. Mr. Mayadunne announced his resignation at a meeting of the trustees on Tuesday attended by directors of the two failed Ceylinco companies, the board of trustees and representatives of depositors association, he said. Producing the Business Times newspaper, Mr Mayadunne had said "he is unable to continue as chairman of the trust thereafter." Offering them- selves as managing agents, the former directors had submitted a payment plan under which depositors will be paid 40% of their deposits over a period of four years and the balance 60% will be converted to shares. Brigadier De Silva pointed out quoting figures from the directors' own plan that they had failed to show satisfactorily how they intend raising the money to implement the plan.

For example the directors need Rs 350 million to pay 40 % under the plan in the first year. But they had not shown how or from where they will get this money, he added. Depositors and trustees will be meeting with the directors for the second round of talks on July 24. The 3-judge bench headed by Justice Shirani Thilakawardane recently ordered the trustees to show cause for their failure to achieve objectives of the trust and to implement a proper procedure during the past 19 months. According to the order trustees would face stern legal action for breach of trust, if they fail to implement the objectives of the trust within two months.