Friday, 18 April 2014 03:23
The depositors of the Golden Key Credit Card Company (GKCCCL) are beginning to see a ray of hope as repayments start coming in, according to a statement issued by CEO Dinesh Perera.
A new Board of Directors was appointed by the Central Bank on 4 April 2013. The Chairman of the new Board of Directors is a former Deputy Governor of the Central Bank of Sri Lanka (P.D.J. Fernando) who has been instrumental in restructuring several distressed finance companies in 2010 and 2011. With the wealth of experience and the able leadership of the new Board, he is confident that the action plan set out by the Central Bank of Sri Lanka could be met.
The Chairman also added that the efforts of the SPV led by Dushanthi Hapugoda is a tower of strength and makes huge contributions towards the repayment to the depositors. The Chairman also expressed his gratitude to the other Directors, V.K Choksy, Aruna Lekamge, Vasantha Gunethilaka and Jehan Fernando, for their dedicated contribution and
The company has accelerated its repayments during the recent past and the repayments made so far is nearing the Rs. 2 billion mark and accordingly some of the depositors are openly expressing their appreciation for GKCCCL, the Government, the Central Bank and the Supreme Courts of Sri Lanka for the keen interest shown and the support extended in solving an issue where around 9,000 depositors were affected.
The background of the current situation is that GKCCCL had accepted deposits on the façade of operating a credit card business and on 18 December 2008 suddenly announced that it was unable to honour the obligations to its deposit holders. Further perusal of the performance of the company revealed that the authorised personnel of the company had purposely misled the public. There are rumours that they even had two sets of accounts.
Subsequent to the failure of the company, the depositors got together and demanded money from the company and its stakeholders. It must be noted that GKCCCL was not an authorised deposit taking institution. However, upon the pleas made by the depositors individually and through various associations to the political leaders of the country including President Mahinda Rajapaksa, the Central Bank led by Governor Ajith Nivard Cabraal took it upon its shoulders in proposing a repayment plan for the depositors.
The efforts got underway with the appointment of the new Board of Directors to GKCCCL, which replaced the historical Committee of Chartered Accountants under the leadership of Prof. Watawala. Initial efforts were made to pay the depositors Rs. 100,000 per depositor and a directive for a repayment plan was issued by the Supreme Court of Sri Lanka based on a well-thought-out action plan.
The repayments have now been fully completed under the first two phases where Rs. 200,000 was paid to each deposit holder. Moreover, the newly-appointed Board of Directors commenced the third phase, and the repayments of the third phase have now progressed to an advanced stage.
In the third phase, the target of the new Board of Directors is to pay Rs. 574 million to more than 6,000 depositors. Rs. 400 million has already been paid to depositors while the completion of the target of Rs. 574 million is expected around mid-May 2014. In phase 3 the funds for repayment would come from selling certain identified assets of GKCCCL. Overall Rs. 1.9 billion has already been paid to depositors as at date under phases one, two and three.
From June 2014 onwards GKCCCL expects to commence the next tranche of repayments where the resource requirements are higher at Rs. 2.5 billion, and is in the process of preparing for the process. The new Board of Directors is confident that this resource requirement though high would be met based on the recent Supreme Court orders that have been delivered.
Nevertheless a close coordination of matters among GKCCCL, the Special Task Force appointed for investigating and seizure of assets of nine former Directors of GKCCCL, the Central Bank and submission of precise quality reports to the Supreme Courts are all important parameters for the success of the coordinated completion of the repayment plan.
GKCCCL has established a dedicated helpline (0115 230079) to convey information to security deposit holders and around 30 to 40 calls are handled each day. New CEO Perera added that a website would also be launched soon in order to convey timely information to the deposit holders via the internet.