GK depositors’ agony continues despite millions spent on ads and committee

by Suresh Perera

Despite incurring an expenditure of more than one million rupees on advertising the sale of Golden Key (GK) assets, the properties were ultimately not disposed of and the whole process appears to have now come to a virtual standstill, a key member of the GK depositors’ association said last week.

"The depleted GK depositors’ fund had to take a battering as it had to finance the cost of advertising", says Ms. Dushanthi Hapugoda, president, All GKCC Depositors’ Association.

In the end, despite spending over a million bucks when many GK depositors have been reduced to paupers, nothing came out of the whole exercise, she complained. "There were bidders, but the assets were not sold".

She said that a three-member Committee of Chartered Accountants was appointed in July 2009 to facilitate a repayment process for suffering GK investors and each member was paid Rs. 200,000 per month until January 2012. This meant that Rs. 600,000 had to be allocated per month to pay the three committee members.

"This money also came from the fund which was set up with the objective of settling struggling GK depositors’, but we ended up paying millions of rupees to a committee from 2009 to early 2012 while depositors have been left high and dry.

The funds collected through the greatest difficulty were largely not utilized to settle depositors, apart from a repayment of Rs. 200,000 each given over the past four years, but to fund advertisements and pay committee members in a futile exercise, she asserted.

"While the depositors’ fund has been virtually drained, we are back to square one, with no hope of sight and nobody in authority interested in the sad predicament and plight of more than 9,000 hapless depositors", Ms. Hapugoda noted. "We are still waiting for justice to be done".

She said that in 2005, Sunil Mendis, the then Central Bank Governor, had clearly pointed out in a report that the operations of GK were a tremendous risk to investors as there was the possibility of the company collapsing. He had directed relevant officials to probe into the matter and adopt preventive measures.

It was because there was no official intervention, despite a coherent warning, that disaster followed leaving thousands of depositors in the lurch, she pointed out. "Already 18 depositors had committed suicide and more than 50 others are sick and ailing due to the loss of their means of livelihood".

Ms. Hapugoda said that it was on the basis of the then CB Governor’s recommendation for action against GK, which was totally ignored, that a group of depositors filed a FR case in the Supreme Court which was taken up for hearing on March 23, 2009. The case was heard about 20 times since then but an order has still not been made.

On July 16, 2012, the counsel for Lalith Kotelawala sought the dismissal of the FR plea. The counsel for depositors were given time till August 20 to file counter submissions, which was done. Later, time was given again until September 17 for Kotelawala’s counsel to submit counter submissions, she recalled.

"We have been rendered totally helpless. We don’t know what will follow. More lives could be lost as desperate depositors are force to undergo more misery and agony", she said. "This has been a long, long nightmare for these unfortunate people".

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