The Finance & Guarantee Company Limited (TFGL) is considering reorganizing the company under the new name, Island Finance Company Ltd in order to recommence normal business activities.
According to a statement from the Central Bank (CB) this week on the troubled finance company which is part of the Ceylinco Group, the CB stated that TGFL suffered liquidity constraints in the wake of the crisis in the Ceylinco Group. The CB appointed Merchant Bank of Sri Lanka as the Managing Agent of TFGL with effect from 31 March 2009, in order to strengthen TFGL and restore public confidence in the company.
Consequent to the fundamental rights application filed by some investors of Finance & Guarantee Property Developers (Pvt) Ltd and F&G Real Estate Co Ltd, the CB stated that the Supreme Court issued a stay order to TFGL on 1 June 2009. These developments restrained the day to day business operations of the company.
On 23 October 2009, the Supreme Court lifted the stay order issued on TFGL and currently, the Managing Agent is taking steps to commence business operations of the company on an immediate basis. The CB stated that it has issued necessary directions to enable the company to strengthen its financial position.