Cabraal buried CB’s Golden Key report in 2006: Kiriella

• UNP charges Golden Key depositors have tangible evidence to file suit against CB for dereliction of duty
• Kiriella thanks Justice Tilakawardane for revealing details about the investigation in her PSC testimony
• Alleges report citing GK’s vulnerability was buried following a meeting between CB and Lalith Kotalawela
• Opposition to call for Parliamentary debate on issue

By Dharisha Bastians

A Central Bank investigation into Golden Key that may have led to a suspension of the company’s financial activities as far back as 2006 was buried by the Bank’s Governor Ajith Nivaard Cabraal soon after he assumed office, the main Opposition United National Party charged yesterday.

UNP Senior Vice President Lakshman Kiriella said Supreme Court Justice Shiranee Tilakawardane had revealed details of an investigation by the Central Bank’s Special Investigations Unit in her evidence before the Parliamentary Select Committee that was probing the impeachment charges against Chief Justice Shirani Bandaranayake on 7 December.

He said the investigation had been conducted during the tenure of former Central Bank Governor Sunil Mendis. “According to Justice Tilakawardane’s testimony, the investigation was discontinued after Mendis retired and the new Governor took office,” Kiriella told a media briefing yesterday.

More than 50 per cent of Golden Key depositors invested with the company after 2005, he said. “All these people could have been spared this loss if the Central Bank had performed its duty and alerted the public and suspended their operation,” Kiriella charged.

He said Justice Tilakawardane’s testimony indicated that the investigation may have stopped after a meeting between Central Bank officials and former Ceylinco Chairman Lalith Kotalawela. The Central Bank had a mandate to supervise financial institutions and suspend the operations of those that were found to be unsound, Kiriella said, adding that it was “a clear dereliction of duty” by the supervisory institution.

According to the UNP MP, the evidence at the PSC was sufficient for Golden Key depositors to file legal action against the Central Bank for negligence. “Finally there is concrete proof. There is no point in the Government directing the blame and the depositors’ wrath elsewhere now,” he charged.

The UNP MP also distributed copies of Justice Tilakawardane’s testimony before the PSC as recorded on pages 1513-1514 of Volume 2 of the PSC report. He said based on the evidence given by the Supreme Court judge, the Golden Key depositors could now squarely lay the blame at the Government’s feet, instead of claiming the impeached Chief Justice was responsible for their plight.

In her testimony before the PSC, Justice Tilakawardane said that the investigation had found big problems with the Golden Key Company. She said she had randomly pulled a file out of large pile and found a record that said the Central Bank’s proceedings against Golden Key had been concluded.

According to Justice Tilakawardane, the minute on the documents said: “The Monetary Board is informed of the above and is invited to approve a discontinuance of the examination commenced in respect of the Golden Key Credit Card Company under Section 11.”

In her testimony to the PSC, the Supreme Court Judge noted that the findings had been made in 2006 and if acted upon, its operation would have been suspended before many more thousands of people invested in the company.

Kiriella said the transcript shows that the Leader of the House Nimal Siripala De Silva had also admitted the Central Bank had failed to do its duty in the Golden Key case.

“That means the Central Bank has failed to do its duty,” the transcript quotes De Silva as saying, after hearing Justice Tilakawardane’s testimony.

Kiriella said the UNP would be asking for a Parliamentary debate on the issue next week.

Several attempts were made to reach Central Bank Governor Ajith Nivaard Cabraal for comment, but he remained unavailable.

The Golden Key Company suffered financial collapse in December 2008 owing Rs. 26 billion to some 9,000 plus investors. Golden Key ran a high yield investment scheme which did not have enough revenue-generating cash flows to sustain the high returns promised to investors.

The Golden Key Company featured prominently in the charges against Chief Justice Shirani Bandaranayake and several hundred depositors were mobilised to agitate for her removal during the impeachment proceedings.