The Finance & Guarantee Company Ltd (F&G), renamed the Island Finance Company after the collapse of its parent organisation – the Ceylinco Group, is defaulting fixed deposits by failing to return the money on maturity, even after the Central Bank’s intervention to normalise its operations, depositors alleged.
Last year, F&G’s Central Bank-appointed Managing Agent, the Merchant Bank of Sri Lanka (MBSL) sent a April 24th-dated letter signed by its chairman Janaka Ratnayake to depositors requesting them to renew their deposits for another year, but there was no indication at that time to further extend the period of repayment of deposits on maturity.
Now depositors are not being allowed to withdraw their money. “What right do they have to spend our money as they please?” asked one angry depositor.
Mr Ratnayake, against who most of the depositors’ wrath has been directed against, resigned last week in line with government rules that all heads of state firms step down after the recent elections and has been appointed as the chairman of the Export Development Board.
Depositors noted that the unilateral action of the company would result in a win-win situation only for the management and not the policy holders as they badly need money for their day-to-day living. Most of these depositors are entirely dependent on the interest of these deposits. Some of them are contemplating legal action against the company for the failure to return their deposits on maturity.
When asked to comment on these complaints, Director / Deputy General Manager (Finance) F&G Co, Priyantha Dharamasiri said that they are still not in a position to repay the deposits on maturity as the company is struggling to generate some business.
He pointed out that the company is paying an annual interest rate of 9% and noted that they are still not using the new name because they have to get the approval from the directors of F&G Property Developers Co Ltd and F&G Real Estate Co Ltd who are shareholders of the company.
However depositors said the Island Finance Company operates from the second floor of Green Lanka Towers, Nawam Mawatha, Colombo 2 where the name board is clearly displayed at the location.