No interest or capital for past two years, say IFL depositors

by Lalin FERNANDOPULLE

Depositors of Industrial Finance Ltd (IFL) said that they have neither received their capital nor interest for the past two years since the company collapsed due to financial mismanagement.

“We are left high and dry without any payments despite repeated appeals to officials. The plight of elderly citizens is precarious”, a depositor said. People’s Leasing Company Ltd(PLC), a subsidiary of People’s Bank is the managing agent of the crisis hit IFL.

The Central Bank entrusted PLC with the task of managing IFL in 2009.

CEO, PLC, D.P. Kumarage said that there was nothing much that PLC could do to repay IFL depositors as the company is not generating revenue.

“We are in search of a good investor who could take over IFL and resume operations”, he said.

IFL sources said that it was impossible for an investor to take over the company as it has huge liabilities. The company has run into debts and has only a few assets.

IFL still has around 60 employees whose salaries are being paid by existing recoveries by PLC. Depositors are getting jittery over IFL’s slow pace of recovery. A top official of the Central Bank said that depositors need not panic as IFL is under its supervision and added that a prospective investor is being sought to run the company.

IFL, a Central Bank regulated finance and leasing company went into crisis in 2008 following financial mismanagement that resulted in heavy losses.

Fitch Sri Lanka downgraded the rating of IFL due to the weak credit quality which was caused by continued operating losses that erode the company’s capital base below the required regulatory level.

IFL had an asset base of around Rs. 1.2 billion by end of 2008. PLC is registered by the Central Bank under the Finance Leasing Act No. 56 of 2000.