The assets of the collapsed Golden Key Credit Card Company, its subsidiaries and directors could go under the hammer with the sanction of the Supreme Court to recover liabilities and repay depositors, a senior Attorney General’s Department official said last week.

"It is likely that the properties will be disposed of by public auction to settle the dues of thousands of Golden Key depositors", he said. "It is left to the Supreme Court to make order on this and the modalities to follow".

This will create history as a unique case because it will be the first time the assets of a company and its directors will be disposed of to repay depositors, he noted.

The process of examining and identifying assets has already been set in motion, the official said, referring to the three-member committee of chartered accountants appointed by the Supreme Court last week.

The committee, comprising Lakshman R. Watawala, Nelson Nagasinghe and Mahendra Panditha, which will function in consultation with a director of the Central Bank, was directed by the Supreme Court to submit an interim report on a tentative method of operation within a fortnight.

"It’s a step-by-step mechanism", he pointed out. "After the assets compiled by the Central Bank are examined and identified by the committee, the Supreme Court can order the District Court to prohibit and auction such property".

It may not be possible to repay all the depositors at once as assets have to be sold in an ongoing process to recover liabilities, he explained. "But, they can expect relief at some point".

The Supreme Court, which is now hearing a Fundamental Rights (FR) application filed by a group of Golden Key depositors, has ordered that the deposits be settled under a scheme starting with the lowest value.

Depositors should also be paid a part of the interest due as a measure to grant them some immediate relief, Court observed.

The three-member bench headed by Chief Justice Sarath Nanda Silva comprised Justices Shiranee Tilakawardena and K. Sripavan.

The Chief Justice said the Monetary Board of the Central Bank had adequate powers under the law to recover and pay back the deposits, which had been fraudulently obtained by Golden Key.

Action to prohibit and auction the assets of those responsible for the offence of defrauding and misusing public funds can be taken by the Monetary Board, he pointed out.

The FR case will come up for hearing again in the Supreme Court on June 1, 2009.

When the criminal action against Ceylinco Group Chairman Lalith Kotelawala and other directors came up before Mt. Lavinia Chief Magistrate and District Judge Harsha Setunge last Thursday, Deputy Solicitor General (DSG) Sarath Jayamanne said the CID had found an electronic air ticket and a boarding pass in Kotelawala’s office.

He said that Kotelawala had been planning to leave for Singapore on December 30, 2008 shortly after Golden Key crashed.

Rienzie Arsecularatne, PC, counsel for Kotelawala said his client, as the Hony. Consul General had been visiting Singapore regularly for medical treatment.

DSG Jayamanne told court that Kotelawala had transferred Rs. 92 million from Golden Key to his other businesses. In addition, Padma Nandani Kumari, another directress and suspect of this case was given six credit cards and she owes the company Rs. 155 million.

He said this money was released on the direction of second suspect Khavan Perera, the Chief Executive Officer and Deputy Chairman of the company. Perera has also released Rs. 440 million to some others who had used GK credit cards. This money has still not been recovered.

The Chief Magistrate also remanded three more Golden Key directors, Mrs. Padmini Karunanayake, Alagaiya Daniel Jegasothy and Bandula Ranaweera after chief prosecutor Sarath Jayamanne told court that the suspects being on bail is an obstruction to the investigation. It could also create public unrest.

Raising objections, counsel for the three suspects said there is no fresh evidence against them and they had also not violated the bail conditions imposed earlier. The Chief Magistrate, however, cancelled bail for the suspects and ordered that they be remanded.

Court also allowed Nallan Tuwan, the auditor of Golden Key now on remand, to be examined by a Judicial Medical Officer (JMO) following representations by counsel M. L. M. Ameen that his client is a terminally ill cancer patient.

Ordering two other suspects, Shehara Fernando and Anita Cassim to surrender their passports, the Chief Magistrate directed them to appear in court when noticed. Fernando was ordered to make a statement to the CID.

The chief prosecutor said that Shehara Fernando was known to Mrs. Sicille Kotelawala, the third suspect who is still absconding. A judicial arrest warrant has been issued against her but she had fled the country.

Lalith Kotelawala and other suspects Deputy Chairman Michael Khavan Perera and Director Finance Saradha Sumanasekara, Director Suramya Karunaratne, Niranjan Fernando, Manager Operations of Golden Key, Directress Padma Nandani Kumari and Manoj Chaminda Jayalath of Ceylinco Insurance and Nallam Thuwan were ordered to be re-remanded.

Kotelawala who was transferred from the Merchant’s Ward of the Colombo National Hospital is now in the Welikada Remand Hospital.

Four other directors, Renuka Carmaline de Alwis, Punya Shantha Ranatunga, Priyantha Dewaprasad Jayasekara and Lasantha Tissa Wickramasinghe are on bail in connection with this 26 billion rupee scam, which has hit the headlines as Sri Lanka’s biggest white collar crime.

The case will be taken up for hearing again in the Mt. Lavinia Magistrate’s Court on June 18, 2009.

Meanwhile, DSG Jayamanne told the Sunday Island that investigators are following up reports that Sicille Kotelawala is in Australia. Information received earlier also pointed to her presence in Singapore and the United Kingdom.

"We have sought the assistance of the International Police (INTERPOL) to track her", he said. "But, nothing concrete has emerged so far".

The Golden Key Employees’ Union has filed a complaint with the labour authorities over the non payment of their salaries since February this year.

"We have been denied our remuneration plus other dues for four months", Union sources said. "Survival has become a nightmare".