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Legal Move

Aug 16, 2009 (LBO) - The directors of two failed property firm in Sri Lanka's troubled Ceylinco group has been given court nod to have a board meeting in prison to approve the setting up of a trust to repay investors, a media report said. Directors of F & G Property Developer (Pvt) Ltd, and F & G Real Estate Co. Ltd, have been permitted to hold a board meeting at Welikada prison, in Sri Lanka's capital Colombo by magistrate's court, The Sunday Times newspaper said.

Court has ordered the meeting before August 24, to set up a trust fund to repay some 5,600 people who have put money in the firms at interest rates between 13 to 30 percent, the media report said.

Ceylinco group chairman Lalith Kotelawala and three directors - Mervyn Jayasinghe, K.A.S Jayatissa and Mohan Perera - are in remand over the case, the report said.

The two firms were unregulated by Sri Lanka's central bank, though another group firm, Finance and Guarantee Company (F & G) was a regulated finance company.

A string of Ceylinco firms, which had taken 'deposits' from people to especially in property, defaulted after another unregulated group firm, Golden Key Credit Card Company collapsed.

Sri Lanka's n unauthorized deposit taking firms were

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