Golden Key scam affects economy

Shirajiv SIRIMANE

Initial Cash flow to the Western Province alone has been reduced by over Rs. 3 billion due to the Ceylinco Group money scam involving over 20 of its companies.

Golden Key Credit Card Company alone was paying around Rs. 550 million a month to its depositors and this has dried up. The Ceylinco fraud started with the Golden Key Credit Card Company and soon spread to its other subsidiaries resulting in over 3,000 employees being deprived of their salaries, overtime and bonuses in the group. This would reduce the money supply to the Western Province by another one billion per month resulting in the employees having less purchasing power.

Former Chairman Federation of Chamber of Commerce and Industry and former Chairman Ceylon National Chamber of Industries, Nihal Abeysekera said that Ceylinco Group was paying close to Rs. 2 billion monthly as interest to their depositors and this has resulted in reducing the buying power of over 20,000 depositors.

It is estimated that the Ceylinco Group paid around 23 percent interest to deposits on an average.

It is estimated that the Ceylinco Group has deposits and liabilities including real estate valued at over Rs. 100 billion including Rs. 26.5 billion worth deposits at Ceylinco Golden Key Company.

Commenting on the economic downturn, he said that the export sector is having problems and due to this people's disposable income is getting lower.

`This situation has been created as the buying power of Europe and USA has reduced,' he said.

Due to this, exporters are exporting less and production is low.

This has resulted in job and overtime cuts, which in turn makes the buying power less.

The classic example is seen in the Wennappuwa area named as the Lira belt since many are employed in Italy. `Here, the employees are remitting money. However, they are not being encashed,' he said.

This is evident in the area as studies have shown that supermarket sales have dropped.

However in contrast families that depend of the rubber industry are doing well as there is steady revenue. "The same does not apply to the tea sector which is not doing too well," he said.