The Sundaytimes Sri Lanka

F&G Trustees fail over 4,000 hapless depositors, warned by Supreme Court

Rs 500,000 spent to pay for one trustee’s mother’s hospital bill

Member of Trustees of the two trusts appointed to find a redress for over 4,000 depositors of failed Ceylinco companies, F&G Real Estate Company Ltd, (F&GRE) and F&G Property Developers Pvt Co. Ltd (F&GPD) are facing tough legal action for breach of trust, if they fail to implement the objectives of the two trusts within two months.

A 3-member Supreme Court bench headed by Justice Shirani Thilakawardane made this order recently considering a Fundamental Rights petition filed by six depositors claiming that the trustees have delayed to achieve objectives of the trust by failing to implement a proper procedure during the past 19 months.

They alleged that the trustees have made payments amounting to a maximum of Rs. 125,000 per month to each of the trustees during the past 19 months without any effective work towards repayment of the monies of depositors. It transpired in court that the trustees have also paid one trustee’s mother’s hospital bill amounting to Rs.500,000.

Considering the submissions made by the counsel appearing for the depositors, the court ordered the trustees to furnish statements of accounts, containing all assets including properties and monies that have been disbursed by them and monies that have been received by them in terms of the trust within two months.

They have been directed to submit a list of trust properties and another list of charges and payments made by the trust to all parties including all employees. Trustees will have to submit a repayment plan for depositors within four months in accordance with the court order, it was revealed.

Stern legal action will follow if the trustees fail to follow these orders for non compliance of the terms of the trust and/or mismanagement and/or breach of trust.The trusts were set up via a court order in August 2010 after considering a Fundamental Rights petition filed by the F&G Depositors Association against the management of these companies. More than 1,700 people have deposited money in the F&GRE while 2,500 people have invested in F&GPD with total deposits exceeding Rs 7.8 billion.

The board of trustees of the F&GPD are A. Sarath de Silva, former CEO – Bank of Ceylon, S.E. Mayadunne – former Auditor General, Upali Jayanetthi – former Tax Commissioner, S.N. Wijepala – former Government Chief Valuer, Ravi Algama – lawyer, Neelani Goonatilake – President, F&G Depositors Association and M.A.Chandra Nalini – committee member, F&G Depositors Association. The board of trustees of the F&GRE are five members of the F&GPD Trust along with Lionel Katuwawala, a former senior Central Bank officer and P.D. Nesakumar.

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