Financial Times

Golden Key repayment plan suspended

By Bandula Sirimanna

Lalith Kotelawala in court

The mediation of the Attorney General (AG) on devising a re-payment plan and the setting up of a trust taking over the Golden Key (GK) assets and selling them to pay depositors is to be suspended following Monday’s Supreme Court (SC)’s ruling that the Central Bank has a responsibility over the money deposited at the private finance companies and issues relating to it.

At a meeting held at the AG’s Department this week, counsel of depositors, GK management and the AG, discussed this matter and decided to allow the SC to make a ruling on the repayment plan.
Counsel for Ceylinco Chief Lalith Kotelawala earlier submitted a detailed list of assets of GK worth Rs 14.5 billion to be transferred to the proposed trust.

Deputy Solicitor General (DSG) Sarath Jayamanne told The Sunday Times FT that the AG’S department had intervened to arrive at a settlement on the re- payment of Golden Key security deposits for the benefit of depositors but that role ends now with the SC ruling. The AG's intervention is no longer required, he said.

The SC granted leave to proceed on a fundamental right petitions filed by some depositors of GK, issuing an interim order stopping GK, its directors and Ceylinco Consolidated from selling or disposing any property or assets and also preventing them from operating or closing any foreign accounts held by GK and Ceylinco.

Under these circumstances the setting up of a separate trust to refund the money of depositors does not arise, Mr Jayamanne said. On Thursday, when the GK financial misappropriation case was resumed before Mount Lavinia Chief Magistrate Harsha Sethunga, Kotelawala, who came to court in an ambulance, was brought into the courtroom in a wheelchair.

In court, Mr Jayamanna forwarded the repayment plan and the list of GK assets stating that finding a way to settle the depositors is now with the SC. “This payment scheme could be forwarded to the Superior Court in order to find a way of settling the unfortunate depositors,” he said.

He added that the Ceylinco Chief had also agreed to refund depositors’ capital which could be paid without any deductions or rebate. He called for legal intervention of the SC to initiate a procedure for the Central Bank to act under the Monetary Act.

Making submissions on the progress of investigations, he said the CID had made three attempts to record a statement from Kotelawala but he had refused to talk citing ill health. Therefore it is essential to obtain a medical report from the JMO because the report has come from the Colombo National Hospital director, Dr. Hector Weerasinghe, but not from the medical officer who examined the patient.

However CID sleuths deployed at the hospital premises had found that a large number of people, including well-known personalities, had visited him -- and he had been talking to them for long periods. Kotelawala fooled the whole country.

He fooled everyone big and small -- including the relatives of a former Minister of Finance. And now he is trying to fool the investigating officers, said the DSG. He told court that several meetings of Deputy Chairmen of Ceylinco Group were held soon before and after the GK with Kotelawala in the chair and the issues relating to the GK were discussed. He noted that minutes of the meetings are now with the CID.

Income and Expenditure of GK were clearly indicated in these documents, he said. According to these figures the value of deposits during the 18 months commencing from August 2007 was around Rs. 18 billion and no one knows what happened to this money, the DSG said. He noted that suspect Khavan Perera had denied that he had given a statement claiming that he knows where the GK money is when the CID questioned him on this issue.

He said a Pension Fund for Ceylinco Deputy Chairmen was set up with initial funding of Rs. 8.5 million diverted from the GK. Making a bail application, Counsel for the Ceylinco Chief, C.R .de Silva PC said that his client has stepped into settling the money of depositors by selling the GK and his personal assets but this was not possible because Kotelawala cannot conduct negotiations under remand custody. This will definitely affect the repayment process, he said.

He disclosed that there was an offer from a foreign buyer to purchase Hotel Ceysands at a price Rs. 700 million and this cannot be materialized under the present circumstances, he said. Magistrate Sethunga refused bail applications made on behalf of Kotelawala and other suspects, and they were further remanded.

Yasmin Chitty, Secretary International Relations at Kotelawala’s office who was earlier issued with summons, was enlarged on Rs. 25 million personal bail and ordered not to leave the country.
Chitty is alleged to have facilitated the transfer of funds out of the country. The case will resume on April 23.

Meanwhile around 300 angry GK depositors on Monday staged a protest outside the home of Bandula Ranaweera, Deputy Chairman of a Ceylinco Group subsidiary, and also pelted stones at the windows, damaging some. They were demanding that Mr Ranaweera intervene in the crisis.


 
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