Dec 05, 2017 (LBO) – Sri Lanka’s Central Bank on Tuesday said that any revival plan for troubled Central Investments and Finance (CIFL) needs at least 3 billion rupees worth investments.
Clarifying regulatory action on the distressed firm, the Monetary Board said at least 30 to 40 percent of the deposits should be repaid immediately as they had not been paid interest or the capital of their deposits for the last 4 year period.
“At the same time, the investors should be credible and the funds should be transferred to Sri Lanka through legal channels, in the case of foreign investors,” the Central Bank said.
The Company was not in operation since 2014 and during this period, the Central Bank had discussions with local and foreign institutions and individuals who expressed their interest in investing and reviving the company.
“CBSL has extended the deadline given to a potential investor on several occasions to prove the availability of funds which has not been fulfilled as yet.”
The company was confronted with severe liquidity crisis since 2013 due to mismanagement and other irregular transactions carried out by the management.
“It has also been observed that the directors and senior management of these companies have fraudulently inflated the value of the assets,” the Central Bank said.
“Examination of the documents relating to such assets has revealed that those are either fictitious or entangled with encumbrances.”
As per the Central Bank, the total deposit liability of the company is about 3.5 billion rupees and the number of depositors is 4,092.
Central Bank said 61 percent of the depositors will be fully settled with their deposits.
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The Monetary Board earlier last month decided to issue a notice of cancellation of the licence issued to Central Investments and Finance.
The Central Bank, however, said the company has the right to submit their objection to the Monetary Board.
Central Bank said the Monetary Board has not issued notices of cancellation to “The Standard Credit Finance” and “City Finance Corporation” as there are pending legal issues.
Central Bank further said that every effort will be made to take legal actions against those who are responsible for the frauds and misuse of depositors’ funds of those companies.