Over the past several months, the Business Times and its parent, the Sunday Times have carried dozens of letters and pleas from readers (cum investors) on how they have been fleeced by so-called finance and forestry management companies. Unable to move the authorities to firmly track down the culprits, the public reliance on the print [...]

The Sundaytimes Sri Lanka

Societal response to deceit, cheating and thievery


Over the past several months, the Business Times and its parent, the Sunday Times have carried dozens of letters and pleas from readers (cum investors) on how they have been fleeced by so-called finance and forestry management companies.

Unable to move the authorities to firmly track down the culprits, the public reliance on the print media to attract the attention of the authorities has grown over the years. Newspapers, in particular, appear to be the last line of defence (appeal) for desperate investors who have lost all their savings through thievery and fraud by unscrupulous company directors some of whom have run away while others are at large, still enjoying a comfortable lifestyle – hiring fancy lawyers to defend them in long-drawn cases – while their investors virtually rot in hell! Four of the culprits have escaped abroad – Sicille Kotelawela, Rohan Perera (former Pramuka Bank CEO) and the Maloney couple – Ross and Swarna (Touchwood). Perera has said he is innocent and blames the then Central Bank (2002-3) management for the debacle. There may be many more who are absconding.

On the political side, a gun-toting Hambantota Mayor is shown clearly in newspapers on Friday running in ‘attack-mode’. However in one newspaper he is quoted as saying he was going to the rescue of the UNP parliamentarians! The group of UNP MPs, given permission by the government to visit the Hambantota Port and airport, came under attack on Thursday.

Is Sri Lanka turning into a society where this kind of behaviour – fraud, thievery, intimidation, harassment, etc – is becoming what one would describe as ‘unavoidably’ tolerable? Every institution that comes under law and order, instead of instilling confidence, faith and a sense of justice and fairplay, now reflects fear and worry in the minds of the public.

Institutions like the Central Bank, which are supposed to provide an independent view to the government on financial management, have become more politically-aligned in its views. Large-scale foreign borrowings, which the public has to pay, are being touted as ‘gains’ in the foreign reserves basket even though this is not earned cash. Whenever a foreign bond matures, another bond (borrowed cash) is floated to settle the maturing bond.

The Employees Provident Fund (EPF), the only pension-like fund for retiring workers in the private sector, has ploughed money in shaky companies in the stock market, raising issues as to whether there are politically-motivated investors to help cronies. Questions, just by a few dogged public interest activists like Harsha de Silva and Eran Wickremaratne (UNP MPs), and good governance activists like Nihal Sri Amerasekere and K. Vignarajah, have been raised on transparency in government accounting and the stock market but with little headway. This is for the simple reason that the government has a steam-roller majority in parliament and can choose to ignore these ‘irritants’ or provide a lame response.

However the biggest problem today, whatever figures trotted out by the government, is the rising cost of living and the inability to purchase day-to-day needs by a larger majority of the population. The crowded supermarkets are no reflection of the plight of the common man, most of who would not step into these super-shops or (even if they do) purchase just a few items.

Government pensioners and retirees from the private sector who have invested their EPF contributions in finance and other depositor-taking institutions are the worst hit. They live on the interest that is obtained every month, an interest rate that has fallen from 12-14 per cent a few years back to 7-9 per cent today. Thus while the interest rates have come down over the years (in an environment where the government is encouraging the people to save), the cost of living has gone up. As an example, if a pensioner received Rs 20,000 per month, 3-4 years ago on his finance company deposit which was barely sufficient to make ends meet; now he would get Rs 15,000 or less while his costs has gone up. How does one live in this economic environment?

To add insult to injury, a dozen or so finance companies and other deposit-taking institutions have crashed and desperate depositors are running helter-skelter seeking relief. Some have committed suicide (such acts still doesn’t even prick the conscience of the powers-that-be) while others, many aging, struggle to meet regular medical bills and other costs.

The letters published in the Business Times also reflect the tragedy of ‘chummy’ relationships between some depositors and institutional mechanisms. These depositor-protectors have turned turtle and enjoying the spoils at the cost of others.One of the worst cases of societal and institutional apathy is the plight of the crisis-hit Touchwood Investments. Sold by the Maloneys’ (before they ran away) to a group of investors led by Lanka Kiwlegedera, the new management and owners have been stumbling and stuttering with false information and deceit. The staff has quit with a few hangers-on running the show. Kiwlegedera announced through the Colombo Stock Exchange (CSE) that the office has moved to Nawala from Bambalapitiya in mid March but investors who called over at the given address found no such office. The Business Times’ own investigation (see story on previous page) shows that the company promised but never rented the Nawala premises, according to the owner of the premises.

Telephone numbers given in the CSE announced by the company either don’t work or callers are responded to in a rude manner.
The Touchwood announcement of its change of address to Nawala still remains on the CSE website. The CSE and the Securities and Exchange Commission must also bear responsibility and must investigate the state of affairs where investors have been clearly duped.
Separately a new group of Touchwood investors have been formed and looking at legal remedies to get their money back while in Thailand, where Touchwood has forestry investments, another group has been formed and action filed in courts.

The common picture emerging today is one where society is stepping in with its own brand of justice – forming associations, demanding action from the government and going to courts. This however is happening only in the case of situations where the threat of harm to life and property is unlikely, whereas thuggery, intimidation and harassment in other instances –political or otherwise – are understandably left aside fearing threat to self and family.

The formation of depositor groups and associations comes essentially because the authorities have failed to bring to book these white collar criminals. The law has failed; injustice prevails.

The government has a mandate to protect all its citizens – irrespective of cast, creed, race or political affiliations. That it has failed in this bounden duty is clear by the number of letters received by newspapers from the public pleading for relief, in some cases where writers prefer to remain anonymous fearing reprisals; another case of going after the messenger (an innocent citizen) rather than tackling the problem! The Business Times will continue to raise these issues in the hope that the judiciary at least will provide justice to the aggrieved, where the authorities have failed.

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