Business Times

Slow progress of GK repayments raise doubts

By Bandula Sirimanna

The second stage of repayment for aggrieved Golden Key Credit Card Company depositors (GK) has been delayed as the disposal of certain Ceylinco assets to raise the Rs.270 million needed for this purpose has not materialized as yet, a member of the Chartered Accountants Committee (CCA) said.

The repayment of GK depositors commenced in early 2009 but the slow progress raised doubts among many about receiving their money. Under the second stage, 75 % of the deposits outstanding or Rs. 200,000 whichever is lower will be paid for depositors after deducting the first stage payment, he said. In the event of any multiple payments made in the stage payment they would be deducted from stage 2 and all other future payments, he added.

The committee hopes to raise a sum of Rs. 1.3 billion from the sale of assets under the second stage while Rs. 782 million had been paid to depositors under the first stage, he revealed. Around 7,000 depositors were paid Rs. 100,000 each under stage one of the repayment scheme.

The Supreme Court recently endorsed the sale of the Golden Key Eye Hospital accepting the offer made by a Singapore businessmen H.O. Soo Fong at price of US$ 12.1 million subject to a bank guarantee of US$ 100,000 being furnished before August 20. However the bank guarantee was not furnished by this date and the official said they would inform the court of this situation and other offers for the hospital may have to be considered.

The committee is negotiating with buyers for the Golden Key Company Australia (Pvt) Ltd. which is a computer company. Measures are also being taken to dispose the shares and debentures belonging to the GK company and to sell 20% of shares of Ceylinco International trading Company Ltd in L&T Infocity Lanka (Pvt) Ltd. A sum of Rs.133 million is to be raised from the sales of these shares.

Meanwhile the GK fraud case was taken up for hearing before the Chief Magistrate Mount Lavinia Nirosha Fernando on Thursday. Making a lengthy submission, on behalf of GK depositor’s senior counsel Athula S. Ranagala expressed concern on the delay of CID investigations into the country’s biggest financial scam and the lack of interest of the Attorney General’s Department. He brought to the notice of the court that the AG’s Department is not even represented at the hearing. This shows their attitude towards the biggest financial scam in the country and probably in the whole of Asia, he said.

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