Bleak festive season and future for depositors in failed fincos’
Majority of the depositors of some failed finance companies this year too are in for a bleak festive season, because, neither their deposits on maturity are paid, nor the interest on which these depositors lived on, has been paid.
According to W. Gunawardena, President, CIFL (Central Investment and Finance Ltd) Depositors Association (CIFLDA), there are an estimated 16 failed finance companies and thus there could be around 50,000 depositors affected as their investments have been immobilized and thus inactive, which would run into billions of rupees.
Mr. Gunawardena reveals that in the CIFL alone 4,200 depositors are affected for the last four years facing untold difficulties with nearly 60 of the senior citizens dying due to the difficulty of meeting their medical bills with a number of them having committed suicide.
Consequent to a media release by the Central Bank (CB) stating that the bank has decided to resolve the issue of four insolvent financial institutions to protect depositors and promote the financial systems stability, the CIFLDA has requested a clarification on this statement as the CIFL was one of such financial institutions to be resolved.
As a result of seeking the clarification, the CB had a discussion with the CIFLDA representatives and the CIFL Board of Directors on November 3 where the CB indicated that the mechanism or the repayment plan has not been finalized by the CB upt date and once it is finalized the plan would be sent to the Attorney General for legal clearance and the payment will be made accordingly in January 2017.
The CB also requested the CIFLDA to proceed with the proposed investor (who has come forward to invest in the institution) and decided to accept the international bank guarantee for the consideration of the loan facility requested by the investor.
The CB has said it would take action to discontinue the services of the People’s Leasing Company. The CIFL Board of Directors was instructed by the CB to initiate legal action against Aspic Homes (Pvt) Ltd and recover the dues.
Meanwhile when the fraud case against Deepthie Perera alias Chulaka Gunawardene filed by the CID was taken up for hearing at the Colombo Chief Magistrates Court on December 9, the CIFLDA appeared as an aggrieved party, and made some requests to the court.
Among these requests are to transfer all the assets belonging to CIFL which are now in the custody of Mr. Perera as per his own affidavit submitted to court earlier. Further hearing of the case was postponed for May 9, 2017.