Several vehicles which belonged to Golden Key will go under the hammer within the next fortnight in the ongoing bid to raise more funds to repay struggling depositors of this troubled Ceylinco subsidiary, a senior authoritative official said.

A public notice on the sale, which will be handled by a reputed auctioneer, will be published in the newspapers this week, he said.

"This will be the first in a series of auctions to be conducted to dispose of the moveable assets of Golden Key, which crashed in December 2008 leaving thousands of distraught depositors in the lurch", the official, who asked not to be named, said.

Some luxury vehicles used by directors of Golden Key will initially go under the hammer at the auction to be held at a location in Bambalapitiya, he noted. "We have already finalized arrangements".

"The biggest hurdle we faced was that these vehicles did not have the required documentation including revenue licenses and insurance", the official pointed out. "We had to sort out these issues before auctioning them".

The audit report of deposits up to one million rupees for repayment, with a maximum ceiling of 100,000 rupees, is expected to be ready by December 4, 2009.

"We will then be able to start paying back investors", he explained. "But, we cannot settle the full 75% under this category due to insufficient funds".

Apart from the bank accounts of Ceylinco Chairman Lalith Kotelawala and his wife Sicille seized on a Supreme Court directive, no other funds are available as the assets have so far not been sold, he pointed out.

"We are also eager to settle the total 75%, as directed by the Supreme Court within three months under the first phase, but there is no cash", he said.

He said that people are unaware that most assets in the list submitted by Kotelawala cannot be sold to raise liquid cash because they have already been mortgaged to other financial institutions.

"We are trying to find assets and properties which do not have mortgages on them", the official noted. "It’s a difficult task".

The Golden Key head office at Duplication Road had been mortgaged to Seylan Bank and the property at Kirimandala Mawatha had also been mortgaged to another bank, he said, naming these two key assets as examples.

"The bank wanted to take over the Duplication Road building, but we managed to put it on hold, restore electricity by settling the outstanding 1.5 million rupees and get the computer system working again", the official said. "It was a virtual battle to place the process back on track".

"People ask us about the Golden Key ENT Hospital and why it cannot be sold when there are prospective buyers", he elaborated. "Do you know that this hospital functions under the Ceylinco Insurance Trust Fund?"

On paper, there are assets said to be worth "billions", but a closer examination reveals that they had already been mortgaged", he noted. "After the mortgages are settled, there could hardly be anything left to repay Golden Key depositors".

He said that under these difficult circumstances, it’s not fair to accuse the Committee of Chartered Accountants appointed to settle depositors of "dragging their feet". "We are doing our utmost".

Meanwhile, at a discussion the Committee of Chartered Accountants had with Ms. Dushyanthi Hapugoda, a petitioner in the Golden Key Fundamental Rights (FR) plea on Wednesday, last week’s The Sunday Island news report headlined, "Central Bank cannot make 75% repayment to Golden Key depositors due to insufficient funds", figured prominently.

Amongst the issues discussed was the selling of the super luxury Mercedes Benz car used by Mrs. Sicille Kotelawala for 42 million rupees to a businessman, as reported in the news story.

"We want to find out what happened to the money as it should have come to the special dedicated fund to repay Golden Key depositors", the official said. This latest model vehicle had been sold on November 12, 2009.

"During the two-and-a-half-hour meeting, we did take up a wide range of pertinent issues and looked at ways of raising more funds to settle depositors expeditiously", Ms. Hapugoda said. "Whatever the reasons, the fact remains that depositors have still not been granted any relief".

"We also discussed details submitted by us on Kotelawala’s assets, worth more than four billion rupees, which had not been taken into account in settling depositors so far", she said.

The question of auctioning the personal assets of the directors of Golden Key and other associate companies, including those of Sicille Kotelawala and Deputy Chairman/CEO Kavan Perera in terms of the law was also taken up, but the Committee was of the view that a fresh court order may have to be obtained, she explained.

It was pointed out that the Supreme Court had already directed that a judicial order from the district court be obtained to sell identified assets and properties which included those of directors as well, Ms. Hapugoda noted.

She recalled that in May 2009, former Chief Justice Sarath N. Silva had observed that even Kotelawala’s house can be auctioned. He wanted not only the deposits settled, but also a part of the interest due paid as a measure to grant some relief.

She said that details of how one Golden Key director had transferred six houses in Colombo, including one valued at 82.8 million to her kith and kin, were also placed before the Committee. The transfer had been done on December 18, 2008 – the day Golden Key collapsed.

Another director ostensibly "overseeing operations in Australia", owes Golden Key 144 million rupees in credit card dues. She is now on remand with some other directors in connection with this scam, Ms. Hapugoda said. "This money will also have to be recovered".

Central Bank Governor Ajith Nivard Cabraal had also asked officials handling the repayment process to ensure that relief is granted to suffering depositors as early as possible, she said.

On depositors whose credit card statements are not in order, a request was made to the Committee to start repayments without allowing a few complicated cases to hold up the whole process, she said.

The question of asking depositors who, for example, had 10 million rupees in capital held up without any interest for the past one year, to pay 10,000 rupees due to Golden Key, was also discussed, she said.

This is grossly unfair as depositors are struggling to eke out a living with their life’s savings denied, she pointed out. "How can they raise money when they cannot even afford to buy their basic essentials?"

"Their dues can be deducted at the time repayments are made".

Kotelawala and Deputy Chairperson Mrs. Padmini Karunanayake, who have been released on bail under strict conditions, have been directed by the Supreme Court to cooperate with any notice issued by the CID, the Committee of Chartered Accountants and/or the Monetary Board.