Disappointment over proposed GK repayment plan being held up
by Suresh Perera-
July 11, 2015
Amidst disappointment expressed by exasperated depositors over the inordinate delay in submitting the Golden Key (GK) repayment plan, Central Bank Governor, Arjuna Mahendran, last week assured that the "matter will be sorted out soon".
Depositors expected the Central Bank to place the long-awaited repayment formula before the Supreme Court, when the GK fundamental rights plea resumed hearing on Tuesday, but Deputy Solicitor General (DSG), Viraj Dayaratne, sought more time to submit the document.
Saying that only a draft from the Central Bank was ready so far, he moved court for a longer timeframe to forward the final repayment solution to court.
"This is frustrating as we were assured that it would be "definitely done" when the case was taken up again on July 7, but it didn’t materialize", complained Dushanthi Hapugoda, President, All GKCC Depositors’ Association.
"Since the May 4 pledge by the government to reimburse 41% of the holdings of GK investors, the Attorney General’s Department undertook to place the repayment formula before the Supreme Court. The case resumed hearing on three days since then – on June 18, 25 and July 7, but we are still waiting for it to see the light of day", she noted.
"The delay is on the part of the Treasury on funding for the proposed repayment solution", the Central Bank Governor clarified.
Anyway, it will be sorted out by the end of the week, Mahendran told The Sunday Island.
While depositors are struggling to recover their dues, Lalith Kotelawala and other former GK directors continue to file motions to secure the release of their personal assets, Hapugoda said.
During last Tuesday’s hearing in the Supreme Court, Hijab Hisbullah, Counsel for the aggrieved depositors, objected to the release of any assets until the final determination on the repayment process.
Court observed that the action plan on repayments should be submitted without further delay. No ruling was made on the release of assets sought by the directors.
The Bench headed by Chief Justice K. Sripavan comprised Justices Eva Wanasundera, Rohini Marasinghe, Buwanaka Aluvihara and Sisira de Abrew.
Hapugoda said that the former directors have filed 11 court cases citing the present GK board as respondents, in their bid to seek repossession of their assets. "We are being pushed around, while those accused of plundering depositors’ funds are trying to go scot free".
In an interview with a television channel last week, Finance Minister Ravi Karunanayake said the reimbursement of 41% of GK depositors’ holdings will begin with effect from July 25.
A Cabinet paper submitted by the Prime Minister has received the green light for the repayment of 41% of deposits up to Rs. 2 million. In addition, Minister Karunanayake has sought Rs. 8.5 billion in Treasury funding to settle the same percentage to GK investors across the board under a specific timeframe.
A sizeable 1,000 depositors fall within the "up to Rs. 2 million" ambit for which around Rs. 400 million would be required for reimbursements, Hapugoda explained. "We are happy about the promised relief, but the other depositors should also be given equal preference".
"We are positive the Minister will honor his word though there are indications that the other depositors will be settled after liquidating GK assets", she continued. "This will be a disaster as the total asset base is estimated at an incredibly low Rs. 1.5 billion".
It is no secret that a major part of the Rs. 26 billion in GK holdings had been invested in nondescript ventures overseas. In one such concern called ‘Golden Key Australia’, the equivalent of Rs. 136 million in Australian dollars was found in an account under the name of a then GK director, Hapugoda asserted.
Officials said that while depositors continue to struggle to eke out an existence after being denied their life’s savings, the new GK board has hired a luxury vehicle for the CEO at a Rs. 125,000 monthly rental.
This is shocking as the company has two vehicles in mint condition, which have not been put to proper use, they noted. "The funds of suffering people should not be allowed to be squandered in this way".
Asked for comment, Hapugoda said that she has consistently protested against the extravagant spending of depositors’ funds and has been branded a "trouble maker" as a result.
She said the time was appropriate to appoint a fresh board of directors with experience and expertise so that the new members can take the company forward.
The new GK board has repaid Rs. 700 million to 8,000 depositors over the past two and a half years, Hapugoda elaborated. "We were preparing to liquidate certain identified GK assets to raise funds for this purpose".
"We are in a dilemma now as some prospective buyers had even paid advances and we can neither sell the assets to them nor return their money", she noted.
SATURDAY, 11 JULY 2015
