Peoples’ money, finance co’s and Central Bank



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by Fr. Augustine Fernando


Diocese of Badulla


In recent years there have been many extremely disappointed citizens who have invested money in finance companies. Some of these citizens are in great distress as they have invested their life’s savings. They did so expecting the assured steady income monthly. There were also those who invested, in a company, called Touchwood, growing trees for timber, something like a sum of about 100,000 initially and a smaller sum of Rs. 150,000 to 200,000 annually over 17 years or so hoping to receive a couple of million rupees in seventeen years. Some young couples with little children invested hoping to receive a sum of money to finance the education of their children. The company published advertisements in the papers promising this return which seemed very attractive to investors who were not rich, but people with modest means who worked hard, lived frugally and as very responsible people saved part of their hard-earned money for the sake of their children.


A couple of years ago, it appeared, in the local newspapers, that those who began this enterprise had invested money abroad too and had left the country leaving the small investors in the lurch. Some investors seem to have been given a "deed" entitling them to some teak trees on a plot of land. I myself know a few who have invested in the company who now remain very disappointed as there is no communication from it. We have also heard of the great disappointment and distress of investors in the ‘Golden Key’ which has turned out to be worse than a rusted iron nail. We also heard of Sakvithi and ETI that have disappointed investors who live modest lives.


DUE REGISTRATION


Just as a trading person or company has to be registered and get authorization to open a business venture, any institution dealing with finance such as a bank, finance company or a leasing company is registered at the Central Bank and duly authorized to begin operation which authorization we believe is given after a thorough investigation befitting the commercial responsibility they are undertaking to fulfil in the community, of course with due gains accruing to the band of directors and partners initiating such a Company.


As all this involves a large volume of finance, such finance companies are registered and come under the Central Bank which takes steps to ensure that the venture is indeed viable, that it is able to make the deposits in the Central Bank, which are required and provide other measures of security that make the financial institution a safe enterprise in which the people could have confidence and that the initiators and founders of a Bank, Finance Company or venture dealing with finance are people qualified to handle the working of such a venture and is equipped with a trustworthy socio-economic background that they can be relied on to make of the venture a viable economic enterprise that will also contribute to the economic progress of the Country.


LOCKING GATE AFTER HORSE


HAS BOLTED


After the sudden crash of finance companies, during the time of the last government, the Central Bank published advertisements in the newspapers warning people about the unreliability of ‘pyramid schemes’ and finance companies that resort to all sorts of financial jugglery and deceive the people. It was of course like locking the gate after the horse has bolted.


Weren’t there also news items in the newspapers about the turncoat politician who had been appointed the Governor of the Central Bank, himself having been involved with his relatives in pyramid schemes and that even an investigation that was going on into the working of a finance company being abruptly halted and which came to be known in subsequent investigations.


Just as the omission of the duty of a single investigation and inspection by a Public Health Inspector could result in the food poisoning of many innocent people, and just as the neglect of due attention by a Railway Guard and an Engine Driver or a technical defect could lead to a train crash, so also not paying due attention by the Central Bank to the economic mechanisms of financial institutions of the Country, their financial capacity, the honesty, integrity and objectives of those who run them, could not only create an economic mess of unwieldy proportions, it also brings about sudden heart attacks and strokes and other illnesses of mind and body among the many helpless people who due to the mismanagement of financial institutions, unexpectedly face unbearable financial losses. Are the investors to abandon all hope of recovering their money and the gains that should have accrued to their investment and silently suffer the consequences because of lies and deception that seems to be routinely practiced by the highly positioned and those able to deceive and domineer others economically.


TOUCHWOOD, SRI LANKAN, ETI, CEB


It is also rumoured that political involvements also complicate matters; politicians are also known to borrow but fail to pay back. I know a politician, a deputy minister in the government, who, when he was a deputy minister of the previous government, ordered and obtained lunch packets and failed to pay Rs. 90,000 to a restaurant! The low class politicians think that all people owe them something.


How is that the founders of Touchwood and its inheritors are seem to be immune from responsibility to the people who have invested in the Touchwood company?


There is the possibility of high positions in State agencies including the Central Bank being occupied by irresponsible persons acting unethically to favour an individual or some people linked to them. The former governor of the Central Bank evading returning to appear before Sri Lankan tribunals shows the quality of irresponsibility of some high officials. It is also reported that money amounting to several billions of rupees of the Employees Provident Fund have been irresponsibly used to buy Sri Lankan Airline shares from Emirates. Some think that they are powerful enough even to ignore the Cabinet of Ministers. Surely there was an individual powerful enough to ignore the Cabinet. The people can pinpoint as to who he is. In the same manner officials of the Ceylon Electricity Board have not deducted the Pay As You Earn (PAYE) tax from its employees. A CEB highup has not only irresponsibly misspent billions of earned by the CEB by supplying electricity to customers but also deprived the State the revenue due to it. High-ups who know nothing of financial discipline and propriety hang on to the highest positions as well as to the lower levels of public administration in Sri Lanka and ruin her with abandon.


FLAWED POLITICIANS &


ENTRENCHING EVILS


Unfortunately Sri Lanka has had to witness and experience Parliamentarians, Ministers and even a Head of State and a Chief Justice and members of the judiciary acting very irresponsibly and getting away with it. Valuable paintings hung in exclusive enclosures and other rare artifacts have gone missing. They could not have gone missing except with the collusion of highly placed persons. Though highly publicized investigations are carried out, in the end nothing comes out and everything is forgotten.


We are a highly flawed people reluctant to admit it but continuing to pursue a highly flawed socio-economic political culture that has also taken hold of the public administration and the people that it is only when the people’s purse in the pocket is affected that they feel the great hurt. Then they wake up as from a long slumber to fall into a long slumber again after cursing the powers that be that the deadliest flash of lightening may strike them seven times. Is this what the establishment chooses to let happen, let the trust of the people be abused, and let irreparable harm be caused to the helpless, spread and entrench plague-like evils, without end forever?


 
 
 
 
 
 
 
 
 
 
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