May 23, 2009 (LBO) – The Merchant Bank of Sri Lanka (MBSL) has been appointed as managing agents of the troubled The Finance Company (TFC), taking over from another state-owned entity, Lankaputhra Development Bank (LDB), the Central Bank said. It said in a statement that Lankaputhra Bank had stabilized the situation at TFC and brought its operations back to normal.
Lankaputhra Bank has emphasised the need to bring in additional expertise in areas such as strategic planning, restructuring, leasing, hire purchase and other investment banking activities, said the Central Bank.
In that regard, Lankaputhra Development Bank has proposed that Merchant Bank of Sri Lanka PLC be invited to provide this expertise and to take TFC forward.
MBSL is a subsidiary of Sri Lanka’s largest commercial bank, state-owned Bank of Ceylon.
Lankaputhra Bank will continue to work closely with MBSL for the next two months, to continue a smooth transition period, the central bank said.
In March 2009, Lankaputhra Bank was appointed as the managing agent of TFC, which is part of the troubled Ceylinco Consolidated group, by the Central Bank to stem an outflow of deposits after the crash of the fellow unlisted group company, Golden Key.