Depositors of the failed Finance & Guarantee Company PLC (F&G) filed a fundamental rights petition on April 27 in an attempt to get their money from the company through a court and Central Bank (CB) monitored payment plan.
Neelanie Goonetillake |
President of the F&G Depositors Association Neelanie Goonetillake told The Sunday Times FT on Wednesday that a few depositors received interest payments until January 2009 but that most payments stopped in December 2008. She said there has been no official correspondence from the company, part of the troubled Ceylinco Group, to the depositors, numbering 7000 with an estimated Rs.13 billion in liability. She added depositors have not been able to get in contact with any of the company’s directors.
Ms. Goonetillake said the depositors are also having problems with Merchant Bank of Sri Lanka Ltd (MBSL) after MBSL took over as F&G’s managing agent in March. The MBSL entered into a 3-month managing contract with F&G to come up with a repayment plan. However, they feel MBSL is sidelining the issues the depositors are faced with. She said the CB is also closing its eyes to the problem and that the Criminal Investigation Division (CID) and the Inspector General of Police (IGP) who they have contacted several times, are also not willing to look into the matter.
Ms. Goonetillake said the depositors are suffering greatly. Some have even deposited their EPF and ETF into the company while others have sold off property and invested that money with the company to educate their children and sustain themselves on a day to day basis. The Association which has around 1100 members meets every Wednesday at Viharamadevi Park and has staged three demonstrations with over 500 people participating each time.
The next step for the depositors is to oppose the liquidation or winding up process of F&G which is expected to take place on June 23. Ms. Goonetillake said the depositors are voicing their opposition to this because they feel they would be the last to get paid.
Restructuring underway
The Merchant Bank of Sri Lanka Ltd (MBSL) is in the process of restructuring the entire business unit of the F&G group, according to Chairman Janaka Ratnayake. On grievances brought up by the depositors, he told The Sunday Times FT that from the two types of interest categories, ‘monthly’ and ‘maturity’, regular payments have been made in the ‘monthly category’ as of this past Thursday and ‘maturity’ interest payments were made up until mid-February 2009. In order to pay the capital, he said the business needs to be improved.
Mr. Ratnayake said the fundamental rights application filed by the depositors were against all the companies under F&G which include Property Developers Ltd (PDL) and Real Estate Company Ltd (RECL). He said the Court allowed the cases to proceed against PDL and RECL but excluded F&G. He said he felt the Court made this move because it was already being managed by MBSL and the Central Bank (CB). Mr. Ratnayake said F&G had asked their clients to renew their deposits for a minimum of one year. He said over 95% of depositors have done so. “They believe in our plan,” he said, urging the rest of the depositors to show patience. |
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