Constant Vigil

June 16, 2009 (LBO) – Sri Lankan depositors should be more vigilant as hundreds of smaller unregulated financial firms are still in existence despite the collapse of a few high profile firms, officials said.

“Those who invested in unregulated companies will not get their money back because there is no money to give. Going to courts will not solve anything,” chairman of the Securities and Exchange Commission (SEC) Udayasri Kariyawasam said.

“Those who got interest from these unregulated companies did not pay taxes, so why should the government use tax payer’s money and bail them out?”

Thousands of ‘depositors’ lost money when companies like Golden Key Credit, Sakvithi Construction and informal financiers such Danduwam Mudalali in southern Sri Lanka collapsed.

Currently the courts are trying to liquidate Ceylinco group assets to pay-off 26 billion rupees they owe to depositors.

“Sri Lanka has over 2,000 unauthorized finance companies,” enterprise development and investment promotion minister Anura Priyadarshana Yapa said.

“Today the village has money.”

Yapa said the villagers are scared to come and invest in capital markets due to the lack of understanding and knowledge. <