thavath sakvithi kenek

[cj4ever]

GOLDEN KEY FRAUD: CEYLINCO GROUP STEPS IN

By Jithendra Antonio

In the wake of the latest developments regarding the Golden Key Credit Card Company Ltd, the Founder Chairman of Ceylinco Consolidated, Dr. Lalith Kotelawala assured its customers payments and protection for its card holders.

The Chairman stated that on Friday 19th that he sought the advice of legal counsel and consulted the authorities including the CID because the Chief Executive Director of the Golden Key Credit Card Co. Ltd, S. Khavan M. Perera, admitted to mismanagement of the company and voluntarily handed over his passport. Mr. Khavan Perera also tendered his resignation from his directorates of Seylan Bank PLC and The Finance Co. PLC.

Furthermore, Dr. Lalith Kotelawala issued a public statement that during the last few days, he realised that the Golden Key has been involved in a major credit card fraud and that the employees of Golden Key are now beginning to reveal certain facts regarding the involvement of Mr. Khavan Perera.

In a press statement, Dr. Kotelawala stated that he has experienced only two such incidents in the past at very senior levels in the Ceylinco Group of Companies. “We survived and both companies are now strong and healthy, one of them even winning a Presidential Export Award this year. Many customers tell me that they placed money in the Ceylinco Group of Companies because of the trust and confidence they have in me,” he added.

Former (as of 19th December) Chief Executive Director/ Deputy Chairman, S. Khavan. M. Perera was functioning as the Deputy Chairman/ Chief Executive of 35 subsidiaries and was on the board of directors of approximately 20 other subsidiaries of Ceylinco Consolidated (Pvt) Ltd.

The Financial Times has been informed that Golden Key Credit Card Co. Ltd. was involved in accepting public deposits offering higher interest rates ranging from 24% to 28.5% per annum without being a Licensed Financial Institution approved by the Central Bank of Sri Lanka.

This was confirmed by a senior official of the Central Bank who also said that the bank is closely monitoring current developments.

One such depositor who wanted to remain anonymous stated that he realised certain interest payments by cheques were bouncing from the beginning of December 2008 and company officials convinced them that the payments will be settled by January 15th 2009. Further he stressed that from the second week of December 2008, Golden Key Credit Co. Ltd. had changed the conditions for the deposit withdrawals stating that the customer was to inform 45 days in advance in order to withdraw his money, whereas initially it was just 7 days notice. Another depositor (of over Rs.10 million) also claimed that he found out the resignation of Mr. Khavan Perera had taken place as a consequence of an internal audit conducted under the guidance of the Ceylinco Group Chairman, Dr. Lalith Kotelawala after finding out that depositors of Golden Key were withdrawing money on a large scale.

Last Thursday (Dec. 18th) when the Financial Times contacted Mr. Khavan Perera regarding the issue, he stated that “Though there have been lots of rumours that the company is having financial difficulties, there is no such major financial issue.” However after it was publicly announced on Monday Dec. 22nd that Mr.Perera admitted to mismanagement on Friday (19th), neither he nor the Finance Director of Golden Key Credit Co. Ltd. were available for comment.

The Financial Times has been informed that currently, control of the Golden Key Credit Co. Ltd. and its subsidiaries, (including Golden Key ENT Hospital (Pvt) Ltd.) have been handed over to the Board of Directors of Ceylinco Insurance PLC. However Chief Executive Director of Ceylinco Life, R. Renganathan said that he is not in a position to comment whilst Chief Executive Director of Ceylinco Insurance PLC Ajith Gunawardena stated on Thursday that he is not aware of such a change since he was out of country.

In a separate advertisement Golden Key customers have been summoned for a meeting at Colombo's BMICH at 2pm on Tuesday the 23rd December.

 

[shakespeare]

attada

 

[nipunaplus]

sirawata

 

[hishan1983]

sure da?

 

[dumindaka]

apoi mage salli

 

[gaveen5555]

Weldone Srilanka.u r breaking records..

 

[Aragorn]

haffata siri!!

 

[cj4ever]

daily mirror eke thiyenne

 

[cj4ever]

apoi mage salli

ubath salli demmada

 

[b squad]

yea this is tru golden key is closed now
lalith kothalawalata toku para

 

[kingdewi]

Horu....Serama HORU

 

[cj4ever]

Ceylinco to sell Seylan shares to pay Golden Key depositors
By Bandula Sirimanna

As the Golden Key Credit Card crisis grew, Ceylinco Consolidated Chairman Lalith Kotelawala -- in an unexpected move -- yesterday announced he was divesting the stake of his Ceylinco Group in Seylan Bank, saying he needed the money to settle depositors at the crisis-hit credit card company.

The move came amidst concerns from the Central Bank where officials were worried about the impact on deposits at the Seylan Bank, founded two decades ago by Mr. Kotelawala, a powerful and politically-influential businessman.
Lalith Kotelawala

Seylan Bank CEO Ajitha Pasqual confirmed the Ceylinco Group was exiting and selling off all its interests in Seylan. "It may be 23-24 percent or even more. Mr. Kotelawala wants to raise funds to settle Golden Key depositors," he said, adding that there were two interested parties in buying this stock, one from abroad.

Mr. Pasqual said there was no cause for alarm as Seylan had met all the statutory requirements, and was "safe and sound." The CB in a statement said certain depositors of some of the regulated companies in the Ceylinco Group had shown "signs of stress" over the recent events at Golden Key.

"This emerging situation naturally causes concerns within the financial system, since there are two licensed banks and several registered financial institutions popularly associated with the Ceylinco Group of Companies," the regulator said adding that the CB had enough regulations to protect depositors in regulated institutions.

Thus, it said the public should continue with normal financial transactions with licensed and registered financial institutions and were assured that the Monetary Board would act in case there was any imminent risk to such institutions.

Mr. Kotelawala, under pressure from depositors to return their money, said in a newspaper advertisement yesterday that he was divesting the investment of Seylan Bank, which triggered speculation that Seylan was being sold. This prompted the bank to issue a clarification later in the day admitting it had received inquiries from the public, and saying that it was the Ceylinco Group's stake in Seylan Bank that was being sold to settle depositors at Golden Key.

There are an estimated 10,000 depositors at the credit card company. They include doctors, engineers, business professionals, housewives, parliamentarians, past and present test cricketers, pensioners, retired bank executives and heads of state bodies – depositors drawn by the high interest rates.

The crash of the company came when an increasing number of anxious depositors -- starting from the Sakvithi scandal and 'word of mouth' information that Golden Key was also in trouble -- triggered a large-scale fund withdrawal which the company could not meet. Golden Key is not a finance company but collects deposits and issues credit cards.

Following a run on funds, it was discovered that while the company showed a deposit base of Rs. 5.9 billion on the books, the deposits should have shown an actual figure close to Rs. 26 billion, sources say. The company was unable to meet the withdrawals of some of the bigger investors.

The Sunday Times learns that at an internal inquiry after the issue came to light, Mr. Perera had denied any financial misappropriation, or personal profit, or that he maintained two sets of books, but admitted to mismanagement. He is a director of nearly 40 companies of the Ceylinco Group, and according to company sources had been transferring monies from the credit card company to persons involved with the other companies. One of the persons close to him in the company had been found to have over Rs. 150 million in her credit card account.

An internal audit into the goings-on at Golden Key has been launched by Seylan Bank. One of the findings has been that no proper audited accounts have been maintained by the credit card company. The probe is set to question the auditors responsible for the account, Messrs. Laurie Muthukrishna & Company, Chartered Accountants.

Earlier this week, the Criminal Investigation Dept (CID) began a probe into the crisis. Detectives said that the company's CEO Khavan Perera had given a voluntary statement to them.

They said Mr. Perera had admitted to some mismanagement of the funds. He had not been detained, however.

Other sources said the company had invested in several ventures, some of which were not viable in the current economic climate. Real estate, a primary investment vehicle for the entire Ceylinco Group, had also suffered heavily in recent years. Mr. Perera was unavailable for comment throughout the week.The company said it would remain open for depositors to collect forms to provide details of their investment as there were problems with the current date base.

Scores of depositors flocked to the BMICH on Tuesday where Mr. Kotelawala briefly said the company would fulfill all its obligations, before being whisked away from the premises.

Mr. Kotelawala said there had been mismanagement at the company, but it was not fully explained, He added CEO Khavan Perera had admitted to mismanagement and had been suspended. (See The Sunday Times FT for more on the crisis).

Bankers, who declined to be named, said Ceylinco -- despite assurances by Mr. Kotelawala to meet all the liabilities – would not find it easy to raise the billions of rupees that need to be returned.

"It's most profitable company in the group is Ceylinco Insurance and since this is a listed stock in the Colombo Stock Exchange, they can't pull out money without shareholders’ approval. Seylan Bank and The Finance Co are also listed," one banker said.

While Mr. Kotelawala has just over 1 percent shares in Seylan, his companies through direct, indirect and cross-holdings own a sizable, majority stake in the Bank.

The official clarification from Seylan yesterday stressed that the assets of the bank are not intended for sale, nor are investments made by the bank or any shares owned by the bank.