CIFL repayment plan – could it be bettered?
The story in the ‘Sunday Times’ of the Sri Lankan who returned home from foreign employment with his lifesavings of Rs: 5 million is heart rending. This happened as recently as June this year, a time that had been indicated by the Central Bank (CB) as a time as good as any before, for investment with CIFL. This company which advertises the departure from employment of marketing executives, as if they were criminals, did not announce the departure of its chief executive.
Your newspaper is full of news regarding the now failed CIFL. It appears that the CB has produced a repayment plan which extends upto seven years. It does not seem, however, that the recoverables from the unwise investments and personal assets of present and past directors who enriched themselves, or siphoned off funds have not been factored into this repayment plan. Why not look into this aspect as well to see whether it would provide an enhanced source of funds for repayments? Even if this means the dissolution of the company which does not deserve continued existence even with a name change.
I would suggest that the CB offers all depositors who have Rs. 500,000 or less the option of considering their loss as irrecoverable and the maximum payable through the Sri Lanka Deposit Insurance Fund (SLDIF) be offered to them. A depositor receiving Rs. 200,000 against a deposit of Rs. 500,000 might still consider it as something better than having to trade in the share market and expect full recovery of his deposit in seven years. The number of small depositors to be dealt with will then reduce considerably.
The exercise of conversion into shares is mind-boggling. Not only for its burden with sheer numbers, but also for the glut it would create in the market pushing down the price of a share to a beggarly 5 cents or even less, never to rise again at least until the new investor with a capital infusion of Rs.1 billion has dealt with a total deposit liability of Rs. 3.4 billion, and then begins to make a profit himself. This will take until kingdom come.
The total life expectancy in Sri Lanka is 74 years and 6 months. It is nothing but fair that the ages of the senior citizens involved also be taken into account in the repayment plan in a manner that ensures complete repayment by the time they reach this age. It would be inhuman and unethical to keep them bound by agreements that extend into a time when they can statistically and reasonably be expected to be dead.
I would appeal to the professional organizations whose members these swindlers are in, to expel them.
And to that famous cricketer who, flipping a ball from hand to hand, sang the praises of this rogue institution to turn over his earnings from that advertisement to charity, if he has a conscience.
Shirley Fernando
Negombo