GK depositors shocked by new payment plan
View(s):Depositors of the Golden Key (GK) Company have expressed shock and dismay over a government pronouncement that only 41 per cent of their dues would be paid within a year, accusing the authorities of misleading them.
At a meeting with depositors last week in which the Business Times was also present, Finance Minister Ravi Karunanayake said all depositors will be settled in full within one year. He said details will be worked out by the Central Bank (CB) but said the new plan will be implemented only once depositors withdraw cases filed on the GK issue.
However on Thursday, the Minister said the government had agreed to pay 41 per cent of the deposits of the depositors, a figure which was not mentioned at the depositors’ meeting.
The Business Times learns that the CB is now planning to present a proposal very much similar to the current payment plan in force. The proposed plan includes the settlement of 41per cent of deposits and conversion of 59 per cent into shares at the GK Special Purpose Vehicle (SPV).
The only difference between the two plans is that the new proposal provides for the 41 per cent payment to be made as a lump sum whereas under the current, ongoing plan, the payments were stretched as installments over an unspecified period.
GK depositor Alex Jayasinghe told Business Times that they had full confidence in the new CB Governor but was shocked when they learnt about the new repayment plan. He said they cannot accept the new proposal and they are not ready to accept shares of a bankrupt company.
Meanwhile when the GK FR case was taken up for hearing at the Supreme Court on Monday, Chief Justice K. Sripavan said that in the event the petition is withdrawn, there would be no safeguard for the depositors and therefore directed the CB to come up with a payment plan for consideration.