About eight years ago I returned to Sri Lanka after a stint of several years abroad working in top firms as an international consultant. I brought back with me considerable financial assets and after purchasing some high value beautiful property in Colombo and outstation and two nice luxury vehicles I invested over Rs. 20 million [...]

The Sundaytimes Sri Lanka

Upcoming second plunder of Golden Key depositors

Five years on, Golden Key depositors still struggle to get their dues

About eight years ago I returned to Sri Lanka after a stint of several years abroad working in top firms as an international consultant.
I brought back with me considerable financial assets and after purchasing some high value beautiful property in Colombo and outstation and two nice luxury vehicles I invested over Rs. 20 million in the Golden Key Co (GK) and settled down with my wife to what I thought would be a trouble free and comfortable retirement in heavenly Sri Lanka.

I was stunned but not devastated by the crash of GK five years ago. I mourned over my loss for some time but unlike my compatriots who were overnight pauperised by their total loss of financial support I still had considerable assets and soon resolved to put the past behind me and live a comfortable life style which I found to be possible. Of course like any human being I secretly yearned for a total or part return of my money and kept in touch with activists such as Anusha Emert and Marco Perera and more recently Malcolm De Silva who worked diligently organising demonstrations; meeting the President, petitioning several courts from the lowest to the highest, meeting relentlessly with Central Bank officials the Police, anyone in fact who might help in any way to facilitate a return of at least a part of our lost money.

The breakthrough came only recently when the Chief Justice and their lordships of the Supreme court ordered fraudster Lalith Kotelawala and the other Directors of GK to report all their personal assets to the court to be disposed of and the monies paid to GK depositors against at least part of their security deposits.

About this time a body known as the depositors representative committee led by the energetic Marco Perera and Malcom De Silva through clever espionage work succeeded in unearthing the Ciesot Co; shares of which 50 per cent was owned by Kotelawala and not declared to the Supreme Court thereby incurring the risk of being charged for contempt of court and being sent to jail. Also fraudster Lalith never declared a penny of his personal stakes in foreign banks and company holdings and the consequences of this are being hotly investigated by the depositors representative committee and the final result will only be known at a future date.
The conventional wisdom was that the personal and company holdings of GK and Ciesot would yield about 41 per cent of depositors money with prudent and transparent action to obtain the best prices on the market.

Towards this end a newly reconstituted Board of GK was created with one Director (an economist) from the Central Bank and three Directors from GK depositors associations.

Later the President of Sri Lanka and the Supreme Court in their wisdom directed the GK board to take on board the depositorsrepresentative committee who as depositor stakeholders would assist and monitor the Board in its day to day workings.

Two weeks ago Dushanti Hapugoda (one of the Directors appointed on behalf of depositor associations, the other is Wasantha Gunathilake) went to town like a Royal Queen claiming falsely the credit for unearthing the personal and company assets of former GK directors. She grandly promised in several newspaper headlines that she would ensure that all depositors would be paid 41 per cent of their security deposits shortly. All depositors were elated! Separately the depositors’ representative committee who with native cunning are busy digging up the hidden assets of the former GK directors advised us that they have the means and inside knowledge to increase this figure up to 70 per cent right now and not later. This they would do as soon as they commenced sitting with the new board as otherwise Dushanti Hapugoda would claim the credit and they were unsure of her motives with regard to selling and releasing all gains to the depositors immediately.

The worst fears of everybody were realised when the CEO Migara Handunge of the Central Bank and Dushyanthi Hapugoda released a terse statement to the press on Sunday March 30th, 2014.

Contrary to the earlier promise to pay cash 41 per cent to each depositor, it was stated that Rs.2 billion or more would be retained by the board under its total control and spent solely in a madcap plan to revive the dead GK Co and its hi-tech industrial subsidiaries. Further the Co. would retain (not sell) the Ciesot shares worth billions and run the Eye and ENT Co. at Rajagiriya.
Regarding the appointment of the watchdog depositors representative committee as instructed by the President and the Supreme Court of Sri Lanka, this was dismissed with contempt and derision by this duo.

Dushanti Hapugoda said in a one line statement that such a committee ‘will disrupt the whole process” and Handunge noted that the involvement of a depositors representative committee will not arise.

For sheer gall these one line dismissals of the President’s and Supreme Court’s instructions gets my goat.

Who is this minor perfunctionary of the Central Bank and this Director of a bankrupt private sector company to act more powerful than the President of Sri Lanka and its Supreme Court? How dare they?

Then there arises the CV’s of Dushyanthi Hapugoda and Wasantha Gunathilake who are going to control more than several billions of pauperised depositors’ money in a bid to control and direct and run a vast business complex and its high tech subsidiaries in fields such as IT and software development and agronomy and apartment complex construction.

What are the academic qualifications of Dushyantha Hapugoda and Wasantha Gunathilake? It is deemed to be no more than the GCE A/Level in arts subjects. What of their professional expertise. Are they IT experts, engineers even accountants? Sadly none of these.
What of their business acumen and streetwise savvy. Have they even run a plantain boutique? Sadly not.

Their only proudly produced activities have been to carry placards and walk the streets shouting slogans for and against fraudster Lalith. For that matter I will vouchsafe that even CEO Handunge has no hands on business knowledge to run a highly diversified Hi-tech Co. Central Bankers are not trained in running industrial or construction ventures profitably.

Their sole tasks are to sit in air conditioned chambers and produce reams and reams of statistics that nobody believes and volumes and volumes of reports that nobody reads.

As a local and international Corporate Manager for over three decades I can see that this entire madcap scheme of giving billions of rupees to people like Hapugoda and Gunathilake to direct/lead a highly technical Co. is a recipe for financial disaster. This will come either through sheer mismanagement or worse through calculated plunder.

And what of the argument that the Central Bank will monitor the activities of GK and its high tech subsidiaries?

I can only point to the sorry track record of other Central Bank monitoring ventures. These are among others. The Finance Co; Ceylinco Realty Estate Co; Ceylinco Shriram; Ceylinco Leasing Co; CIFL; Pramuka Bank; Touchwood and certain monies of NSB, EPF, ETF, etc, etc invested in dubious companies. Tens of thousands of pauperised depositors rue the day they believed in the label registered and monitored by the Central Bank.

Not a single Central Bank official has been investigated or disciplined or sacked for such acts of criminal negligence and possible conniving in fraud. Not a single depositor association has taken the Central Bank to court for failing to prevent fraud by the private sector Directors who monotonously fool Central Bank investigators and flee overseas with billions of depositor funds. Depositors meekly agree to Central Bank repayment plans and accept shares for their millions lost. Shares which are not worth the paper they are printed on. Only God knows why.

The only hope is on self-monitoring by stake holder associations like the depositors representative committee. This committee can be enlarged to include several persons of proven integrity. A large committee will help to prevent fraud by a small chummy group or club of Directors.

Even here the terms of reference of a stakeholder committee must simply be to dig up any further assets possible. To put all assets on the market at the best prices and to settle the depositors as quickly as possible.

Unproven stakeholder committees who attempt to run complex businesses which need to be run by competent technocrats will fail just as badly as boards staffed by some near illiterate Directors.

The Supreme Court it is true approved the GK board and now its depositors’ representative committee but nowhere was it stated by the Supreme Court that anyone should retain and spend and waste billions of rupees of pauparised depositors money in a hopeless effort to obtain a better return in perhaps 10 or 20 years-time. GK depositors cannot wait 10 or 20 years to get some reasonable money. They need money now. To spend on heart by-passes, cancer, kidney ailments, hospitalisation medication, and for nourishment.

Dr. Hirantha Vitharane (MBA, PHD)
18, Longdon Place Colombo 07

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