Delay in Treasury fund transfer stalls GK repayments 2nd phase

Supreme Court approved timeframe lapses today


The second round of reimbursements to Golden Key (GK) depositors have so far failed to get off the ground notwithstanding the Supreme Court (SC) approved one-month timeframe elapsing today, officials said.

The repayment formula for depositors with holdings ranging from Rs. 2 million to 10 million should have been completed by October 4, 2015, in terms of the undertaking given to the SC, but the Treasury’s inordinate delay in transferring funds has stalled the process, they asserted.

"We have done our part by writing to the Central Bank and following it up with a reminder, but there has been no response so far", a GK official said. "There is nothing more we can do about it than wait until the fund transfer is done".

The financial commitment to repay 41% of the holdings of investors under the second phase works out to around Rs. 4 billion, which is being sought from the Treasury as an advance against GK’s assets, he explained.

"Drawing cheques to around 2,000 depositors eligible for repayments is not an issue, but it cannot be done without funds in the kitty", he said.

The Cabinet also sanctioned the repayments and the SC accepted the formula and gave the go-ahead on the undertaking that depositors will be granted a degree of relief as they have suffered for the past seven years, the official explained.

"The Fundamental Rights (FR) plea filed by a group of depositors in the SC was also terminated on the assurance that the Treasury would fund the reimbursements, but it appears that we are back to square one", protested Dushanthi Hapugoda, president, All GKCC Depositors’ Association.

"We were not in favor of the case being wound up because in the event of retraction, we will have no legal hold and nothing to fall back on", she said. "But, what happened at the time was beyond our control".

The undertaking given to the SC was very clear that the second phase of repayments should be completed by October 4, but the process has not even started yet", she noted. "We have our reservations whether it will happen at all in the near future".

Hapugoda said that former directors Kavan Perera and Mrs. Padmini Karunanayake have asked GK to intervene to release their personal assets for repossession even before the second round of reimbursements to depositors could begin.

Amongst them are assets which some directors handed over to GK in writing to secure bail at the time they were remanded, she claimed. "We had to use a substantial quantum of funds in the kitty to repair and give a fresh coat of paint to these properties to be advertised for sale".

However, they could not be disposed of as there was a delay in obtaining the necessary judicial directives, she recalled. "Now, they are to be handed over on a platter to the very people who devoured billions of rupees in depositors’ savings".

"All the former directors are trying to repossess their assets, but that’s a matter for the Monetary Board of the Central Bank to decide on, perhaps on the advice of the Attorney General", the GK official noted.

The critical question that arises is how the Treasury advances could be repaid if all the assets are given back to the former directors, he pointed out. "We need them to be liquidated to raise funds".

The Treasury funding is not gratis. The money has to be repaid after selling the assets, he noted. "Obviously, one cannot expect the government to pay back what others squandered".

Hapugoda claimed that Lalith Kotelawala visits Ceylinco Limited every Wednesday and there are moves to start a new micro finance company. "People who saw him say that he no longer uses the wheelchair he came in for court hearings".


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