The business saga of the Kotelawalas once among the most powerful families in Sri Lanka, ended last week when a new chairman was appointed to Ceylinco Insurance, once the flagship unit of the failed Ceylinco Group.
Lalith Kotelawala and his wife, Sicile, are under investigation over a plethora of financial irregularities at many former companies of the failed group. Sicile is on the run overseas with an international alert being made by Interpol for her arrest. On Thursday, a group of depositors led by Anusha Emmert, President of the Golden Key Depositors Association, launched a hunger fast outside the Kotelawala residence demanding justice and that the former chairman take care of all their lost deposits.
However the protest ended just a few hours after it started when police forcibly took away the protesting Emmert and six others and dispersed the rest of the demonstrators. Bystanders were amused: “There are two laws in the country. Any government-backed protest like the Weerawansa drama outside the UN office in Colombo is allowed while anything else becomes illegal by law,” said a shopkeeper near the Kotelawala residence.
Insurance was the main business launched by the Kotelawala clan which included Sir John Kotelawala, a former prime minister in the early 1950s. It was Justin Kotelawala who started the business, later to be taken over by his son, Lalith who grew it into a giant conglomerate handling anything from insurance, banking, shipping, real estate to montessoris and roadside cafes. With the Golden Key crash in December 2008, the entire empire collapsed with the exception of Ceylinco Insurance which to some extent was professionally run.
The rejuvenated Ceylinco Insurance, having survived the negative fallout of the Ceylinco crisis, is now growing in tandem with the rest of the insurance industry and planning major expansions in the North and East of the country.
Kotelawala has no other links with any Ceylinco company other than The Finance and a few troubled finance companies from the former group, where he is compelled to stay on – by a court directive -- as a non-executive director until government authorities acquire and sell his assets to settle depositors.
Nearly 18 months after the Golden Key crash, the authorities are yet to frame charges against Kotelawala and the rest of the guilty bandwagon. Kotelawala and several directors who were detained for several months have been released on bail while a few others are in remand prison.
Why is it taking this long to file charges, an event eagerly awaited by depositors furious that while they are desperately eking out a living, Kotelawala is back to the high life surrounded by guards and family?
Investigators say it could take five years or more to finalise a charge sheet against the Kotelawala couple and others because it is a case filled with a lot of complex issues particularly following the Internet trail where many transactions were through the web in the case of some companies. Trying to unravel the assets of companies and that of the Kotelawalas here and overseas is also an unending process while not having access to Sicile is another problem, investigators say.
The irony of the situation is that while the investigating process is taking long, there is a possibility of some culprits selling off their assets secretly which may already have been done, according to depositors. The amount owed to depositors is a total of Rs 26 billion while all the available assets, as submitted by Kotelawala’s lawyers to court, is worth Rs 13 billion while others say its less. The government valuation of these assets is still underway.
On July 6, one of the depositors at F&G (a former Ceylinco company) filed a case against the company in the District Court of Colombo seeking a court order for the return of his investment. He was tired of waiting for state efforts to recover the money.
So far, depositors who invested less than Rs 2.5 million have received Rs 100,000 cash while the rest of the cash will be dispersed only after the sale of the assets. The financial crisis that rocked finance companies, essentially triggered by the Sakvithi scam followed by Golden Key, has affected more than 30,000 families across Sri Lanka.
Some of these families have struggled to make ends meet as they depended on the interest income after putting in life-long savings and pensions in a bid to get a better return in an environment where the cost of essentials is rising by the day. There were others who were compelled to end their children’s education overseas as the interest income suddenly disappeared.
The tragedy of the crisis is that apart from the occasional court hearing and an occasional story in the newspapers; the finance company crisis vis-a-vis Sakvithi and Ceylinco is becoming a forgotten chapter in Sri Lanka, which is what depositors fear most. Five years or later down the road, when investigators ultimately file action, some of the depositors are unlikely to be in the land of the living!