June 18, 2015 (LBO) – Sri Lanka’s government has given approval for the repayment mechanism of the golden key depositors which was submitted by Prime Minister Ranil Wickramasinghe.
It has been proposed to grant reliefs to depositors of nonbank inactive financial institutions by the supplementary budget 2015 and several meetings have been held with the relevant stakeholders by the Minister of Finance.
It was proposed to repay depositors who have maintained security deposits up to 2 million rupees in the collapsed Golden Key Credit Card Company within a month, and thereafter to liquidate the assets of the Golden Key Credit Card Company for further repayment.
Cabinet spokesman Rajitha Senaratne said that 544.3 million rupees would be allocated to pay deposits up to 2 million rupees, while about 3949 would be paid for deposits more than two million but below 10 million.
About 4055.01 million rupees would be paid for deposits above 10 million.
Sri Lanka’s golden key depositors were asked by the Finance Ministry to withdraw all cases to be taken up by the Supreme Court on 18 May 2015 following a written assurance of 40 percent pay back by the Central Bank. However it was not took place as the court moved the case to another date.
Meantime the State Counsels Thursday (18) explained the Court of Appeal that the government will repay up to 41 percent of the money deposited with Golden Key Credit Card Company and said the cabinet approval has already been granted in this regard.
The Golden Key Credit Card Company collapsed with debts of 26 billion of which 12.7 billion is capital and 13.2 billion is interest according to initial findings of a Supreme Court appointed committee of chartered accountants.
The committee had said two sets of accounts were found and some assets have already been mortgaged to other parties, complicating a liquidation process.
Golden Key ran a ponzi-style high yield investment scheme which did not have enough revenue generating cash flows to sustain the high yields promised to investors.
Directors of the firm including Lalith Kotelawala were imprisoned and now are now out on bail and the whereabouts of Kotelawala’s wife is unknown.