Accounting accountants!

By S.S.Selvanayagam

The Supreme Court is to take up for hearing today the motion seeking to direct the Committee of Chartered Accountants, appointed by Court in respect of the Golden Key matter, to tender forthwith Audited Statements of Accounts.

The petitioner P.P. Anura Gunawardene in his motion has sought the Court to direct the Committee of Chartered Accountants to disclose specific details of expenditure incurred by them in relation to their budgets.

He has also asked the Court to direct all parties to maintain the status-quo without any material change, including disposal of any asset for a short period of time, to enable independent experienced competent person/s to examine and report on the Business Plan including relevant matters connected therewith, taking into cognisance the observations made by the Court thereon.

The petitioner has cited the Monetary Board of the Central Bank, President Mahinda Rajapaksa,  Secretary to the Finance & Planning Ministry Sumith Abeysinghe, Central Bank Governor Ajith Nivard Cabraal and the Golden Key Credit Card Company Limited as well as Deshamanya Dr. Lalith Kotelawala, Khavan Perera, Sicille Kotelawala, Daniel Jegasothy, Padmini Karunanayake, Suramya Karunanayake, Bandula Ranaweera, Niranjan Fernando and Saradha Sumanasekara of Ceylinco Centre as well as Ceylinco Consolidated (Private) Ltd., and the Attorney General as respondents.

The Committee of Chartered Accountants had been appointed on 18.5.2009 to function as Officers of Court, without incurring any personal liability, to:

(a) examine the lists of assets and properties compiled by Officials of the Central Bank on the basis of the declarations made and any other information furnished by any of the parties to the Application and compile list of the (i) immediately realisable assets; (ii) assets that are realisable in the medium term; and (iii) assets that are realisable in the long term

(b)  prepare a scheme whereby these assets could be brought into a common account from which disbursements could be made to the depositors

(c) compile a list of the depositors and formulate a scheme of payment  

 The petitioner in his motion states that WHEREAS the Committee of Chartered Accountants were thus bounden in duty to have conformed and adhered to State procedures, more particularly those enunciated in the National Procurement Agency Guidelines (NPA Guidelines);

AND WHEREAS the Committee of Chartered Accountants have incurred the 'heads of expenditure' for the periods June 2009 to December 2010, and had requested further approval for the 'heads of  expenditure' for the period January 2011 to June 2011;

AND WHEREAS the Committee of Chartered Accountants have not given duly audited statements of expenditures they have incurred on the budgetary allocations, disclosing transparently the specific details of expenditures for the period June 2009 to March 2010, which ought to have been tendered to the Court, prior to having sought approval for the budgetary expenditure for the period April 2010 to December 2010 or even shortly thereafter; and at least before having sought approval for further expenditures from the Court on 28.1.2011 for a further period from January 2011 to June 2011;

AND WHEREAS furthermore the Committee of Chartered Accountants have not afforded cumulative statements showing the total funds and the respective sources from which such funds had been collected, and the disbursements of such funds for the repayment of the depositors and the meeting of expenditures and the balances available, taking into reckoning the lists set out hereinbefore specified at the time of their appointment;

AND WHEREAS the foregoing Statements of Accounts ought to have been by now audited and submitted to the Court for accountability and information of the depositors, who are the main stakeholders, and whose monies are being so handled in trust, and any breach thereof would be a violation in terms of the law;

AND WHEREAS in addition the Committee of Chartered Accountants have had adequate time since June 2009 (i.e. 20 Months) to have tendered an overall picture of the financial position and/or status of affairs of the Golden Key Company and its subsidiaries, taking also into reckoning the lists at the time of their appointment;

AND WHEREAS the proceedings on 6.8.2010 had inter-alia been recorded as follows:

“Mr. Boyagoda is noticed to be present on the next date and he is directed to work with the Committee on this matter with a view to obtain the maximum advantage of the remaining assets in this case and/or to identify any other assets which may have been transferred despite orders of this Court within Sri Lanka and outside Sri Lanka.

The Directors of the Golden Key Credit Card Co. Ltd., and its associated companies are ordered to assist Mr. Boyagoda and he is to report any Directors who do not co-operate with him to this Court for necessary action. The cost of Wealth Lanka’s assignment is to be borne by Mr. Lalith Kotelawala and not by the Depositors.”

AND WHEREAS consequent to the foregoing a Proposal dated 20.1.2011 jointly prepared by the Depositors and the Directors of the Golden Key Credit Card Co. Ltd., had been tendered to the Court, and the proceedings of 28.1.2011 in connection therewith had been recorded as follows:

“A proposal has been submitted by the Directors and the Depositors for the repayment of the Golden Key Credit Card Co. Ltd., and Security Deposit Holders. Counsel representing the Security Depositors Holders seeks a short date for the purpose of finalising actual terms of settlement.

This Court places on record the fact that Mr. Boyagoda, Wealth Lanka Management (Pvt) Ltd., or the Committee of Chartered Accountants will have no liability whatsoever on the proposed settlement.

(1)  Court suggests that at least a skeleton plan with regard to the working value be submitted in order to confirm that this proposal would be workable and there would be sufficient funds for the implementation of the proposal.

(2)   A professional valuer would be brought into make valuations with regard to the assets referred to in the said proposal.

(3)   Court also suggests that instead of having a public issue of shares an investor be found who would develop the project to obtain the seed capital to restart the companies”

AND WHEREAS steps are being taken to have the aforesaid Proposal, which is more in the nature of a Business Plan as had been noted by the Court as aforesaid, ‘to restart the companies’, to be examined by independent experienced competent person/s;

The petitioner in his motion has moved for the said orders from the Court.