F&G Depositors Association rejects Kotelawala comeback

By Channa Fernandopulle
The Independent Association of Depositors of F&G Real Estate Company Ltd. and F&G Property Developers (IAD) yesterday issued a firm rejection to any intervention into the affairs of the two companies by former Chairman of the Ceylinco Group, Lalith Kotelawala.
Responding to recent media interviews given by Kotelawala which expressed interest in resurrecting and revamping his corporate image, IAD President, C. Caldera at a media briefing reiterated that given the extent of financial mismanagement that was perpetrated during Kotelawala’s tenure as Chairman- which eventually led to the Golden Key collapse – Kotelawala should not be considered fit to head the same Companies again.

 

 

 

 

 

 

 

 

 

 

 
“Mr. Kotelawala is now trying hard to intervene and promising to pay back all the depositors. He promised the Supreme Court to pay back depositors within one year of being granted bail in 2009 and five years have lapsed since without any relief being granted to the depositors. Statements have been made that the money deposited into these companies is black money but we represent a large group of over 4,000 depositors many of whom put their EPF or life savings into these companies. This was not black money but still none of them have been compensated in any way,” he noted.

 
Commenting on statements made by Kotelawala that the collapse of Golden Key was stage-managed by members of the previous Rajapaksa Government, and other senior ranking officials such as former de-facto Chief Justice, Mohan Pieris, Caldera stated that while his association was perturbed by such allegations, they will still maintain the position that Kotelawala must not be allowed to regain control of the Companies.
“We have no faith in Kotelawala’s assurances and promises because of his failure on previous occasions. His companies crashed because of mismanagement and while the previous regime may have made use of his plight, his deeds of fraud and mismanagement have been well recorded.

 
“Our only question is to ask why the authorities have not taken any interest in solving this matter and continue to drag their feet in granting relief to the depositors. Many of these people are elderly and in need of urgent medical care. Already 167 depositors have died due to medical complications following the Golden Key collapse, many of whom would still be alive if relief had been granted.” Caldera asserted.
Elaborating further on the current plight of F&G RECL and F&G PDL, Caldera stated that written consent of the majority of depositors had been obtained to go ahead with a Central Bank Action Plan, which was amended with the inclusion of a repayment plan submitted by his association.
He further noted that his association has secured at letter of credit for $ 1 billion, with an expression of interest for an investment of $ 55 million into the two stalled companies in order to revive them and generate funds to repay depositors of PDL and RECL with 51% and 61% of their investments respectively within a period of 6 months. Thereafter, Caldera claimed his association also has a plan in place to repay depositors up to 100% of their total deposits with the two companies.

 
The foreign investor was said to be an individual by the name of Mrs. Sri Widyathi, however further details on the investor’s motivations and background were not forthcoming.
The plan endorsed by the Central Bank was first submitted to Supreme Court by a separate association of depositors and has since been the focus of multiple Supreme Court sessions, including several sessions headed by former Chief Justice Mohan Pieris, the last of which took place on 10 January.

 
The main item of the action plan being contested is with regards to nominations to the Board of Directors of the two companies, an issue which is expected to be addressed when the case comes before Supreme Court on 10 March.
Currently three associations all claim to represent the majority of the 4,000 depositors with the two companies with each association having fought running legal battles for control over the accounts of F&G PDL and RECL. Caldera’s own association claims to have a clear majority with 2028 members to their name.
Another key faction was led by Brigadier Ranjan De Silva who had initially been appointed by the Supreme Court to oversee the two companies but who was allegedly ousted from his post in November 2013 upon which the entire group of depositors fragmented.