Treasury faces dilemma in implementing President’s GK repayment directive
With the recent directive of the President to repay the actual balance due to Golden Key Credit Card Company (GK) depositors, the Treasury is in a dilemma over disbursing more public money as it has already doled out Rs.4.48 billion from its funds for this cause. In a letter sent on behalf of the president to the Treasury Secretary and to the Central Bank Governor, Private Secretary to the President, Anil Amaratunge, has informed that according to a complaint made by GK depositor Marco Perera the present 41 per cent repayment was highly unjustified.
Although the payments should be carried out in accordance with the Supreme Court ruling on October 23, 2009 with regard to the SC (FR)191/2009 case, the former Central Bank Governor (Nivard Cabraal) had misled the judiciary and secured a court order on March 30, 2014 to re pay just 41 per cent of the deposits, Mr. Perera alleged There was another court order issued on July 29, 2013 to pay back 50 per cent of the deposit instead of the 41 per cent.
However Finance Minister Ravi Karunanayake had obtained the consent of GK depositors Associations to make re-payments on the basis of 41 per cent of the deposit with effect from July 2015. Depositors also agreed to terminate all cases filed by them against the GK and the Central Bank.
A sum of Rs. 3.89 billion has already been paid under the 41 per cent repayment scheme among 4,809 GK depositors who have deposited monies up to Rs.10 million, GK CEO Dinesh Perera told the Business Times adding that less than 400 depositors with deposits of Rs.10 million will have to be repaid under the final stage of the new repayment plan.
Under this set up the Treasury is finding it difficult to implement the directive issued by the president, officials said. On the other hand, the Treasury has already disbursed Rs.4.48 billion in spite of the value of currently available GK assets being in the region of only around Rs.1.9 billion. Even after liquidating the total GK assets the Central Bank will not be able to reimburse the total sum of money spent from government coffers, a senior official said adding that some of those GK assets cannot be sold as it was mortgaged.
A liquidator is yet to be appointed by the Central Bank to wind up operations of Golden Key (GK) although the Governor has pledged to make the appointment by September 2015, Mr. Perera alleged. According to Attorney Generals’ Department sources, the former GK directors have filed 11 court cases citing the present GK board as respondents, in their bid to seek repossession of their assets. It was not immediately clear whether the termination of the court action had prompted Ms. Sicille Kotelawala (now in remand custody) to return to Sri Lanka.
She left the country shortly after the company collapsed in December 2008 and lived in the United Kingdom. A criminal action against the former GK directors is still pending before the Colombo High Court. The total deposit base at GK is about Rs. 26 billion. Out of that, Rs.6 billion had been transferred to other companies within the Ceylinco Group and Rs.14 billion misused by the management. A sum of Rs. 1 billion had been spent illegally and balance Rs.5 billion had been not accounted for, AG’s Department sources said.