CB says no investment proposals received from TFC

• Says despite media reports no proof of funds and restructuring plan submitted to CB 
• CB recalls licence cancelled on 23 Oct. with 60 days given to appeal 
• Since no capital infusion plan has been submitted CB to proceed with decision on cancellation notice  

The Central Bank yesterday said that as The Finance Company (TFC) had failed to provide any investment proposals to the monetary authority, it would continue with legally empowered due process and make a decision on the cancellation notice issued to TFC in the coming weeks. 

In October, the Central Bank announced that it had cancelled the licence issued to TFC with immediate effect to safeguard depositors but was still willing to consider any proposals submitted by a credible investor.  

In the past few days, several media reports indicated that TFC may have an investor lined up. However, the Central Bank yesterday insisted that despite such reports, no proof of funds for capital infusion or a Business Restructuring Plan had been submitted to it. 

“The Central Bank issued a notice of cancellation of the licence granted to TFC to carry on a finance business under the Finance Business Act No. 42 of 2011 (FBA) on 23 October 2019. The Central Bank also informed that in terms of the provisions of the FBA, the company had the right to submit an acceptable proposal for investment in TFC along with proof of funds for capital infusion and a Business Restructuring Plan for the consideration of the CBSL within 30 days of the date of issuance of such notice,” the Central Bank said in a statement.

“Even though the aforementioned news articles mentioned that the TFC informed the Colombo Stock Exchange (CSE) that it had been approached by three interested parties to consider investing in the company, no such proposals had been submitted to the CBSL so far,” it added. 

Therefore, the Central Bank clarified that the information published in the newspapers articles and news websites regarding any potential investments was not true. 

“In view of the above, the Central Bank wishes to inform that in terms of the FBA, the Monetary Board shall take a decision on the notice of cancellation issued to TFC after the expiration of 60 days from the date of notice of cancellation.”