Unforgotten challenges

Tuesday, 7 December 2010 00:01 -     - {{hitsCtrl.values.hits}}

THE Attorney General’s Department has informed the courts that they have taken over the responsibility of repaying the depositors caught in the Sakvithi scam, but are unclear as to the timeline involved.The Golden Key depositors remain under contention as well and a realistic solution to the problem clearly needs to be found.

Sri Lanka is aiming to become a financial hub, but the issues that erupted with the global financial crisis almost two years ago are still unresolved. Despite efforts by the Central Bank and several rounds of discussions with the president as well as a venture into the legal possibility of liquefying Lalith Kotelawala’s assets, the depositors’ concerns remain. While security deposit repayments are being made the larger investments remain deadlocked in liquidity crisis and as laudable as the Attorney General’s decision is, depositors will be concerned as to the realistic terms to achieve this goal.

Responsibility is a factor that has been much argued over – as a non-registered financial institution the Sakvithi scam has left depositors without the protection of the Central Bank. Then came the arrest of the perpetrators without the cash and the acceptance of the Attorney General to accept the repayments. People are wondering as to how these repayments will be made and with what assets. Time is of the essence in this instance as well with many people relying on interest payments for their livelihoods.

Golden Key depositors are finding it hard to find buyers for the hospitals, hotels and other assets that have been handed over for selling by the Supreme Court. Despite the Golden Key hospital being on sale since early this year the transaction remains in limbo with investors being wary of spending a large amount of money and those in-charge not being able to sell at a lower price since the depositors would lose out. A venture to establish a company and issue shares to the beleaguered depositors was mooted during a meeting with President Rajapaksa but there were disagreements between the depositors themselves and the plan fell apart.

It is clear that a solution is needed and that all stakeholders need to work towards it. But the inability to fathom this incredibly complex problem and find a solution for it has hampered the confidence of many potential depositors. Hopefully the lessons are being learnt and caution employed. Sri Lanka will have to put in new confidence building measures if it is to realise its dreams of being a financial hub with many institutions, foreign and local finding ways to assure people of their reliability.

The oft asked question is what is to happen to these people? Disasters are plentiful these days with more and more people joining the ranks of those needing compensation. It was reported that over 100 acres of paddy have been destroyed by the rains putting countless farmers in dire straits. Unrelated as these issues may seem it serves to highlight two points. One is that the needy are many, and second, that in this melee of catastrophes solutions are few and far between. It can only be hoped that by highlighting a fact repeatedly the danger of it being forgotten is lessened but whether that suffices to find solutions, only time can tell.