Ceylinco Shriram repays 84% of depositors

Ceylinco Shriram has settled dues of 84.5 percent of the investments of 4,928 depositors amounting to Rs 2.6 billion. Five instalments have been completed up to October 22, 2013, and included a payment of Rs. 1.1 million per depositor or 60% of the deposit outstanding whichever is lower.

With the collapse of Golden Key Credit Card Company Ltd in 2008 and its consequent impact on the Ceylinco Group, Ceylinco Shriram with a 12-year track record was unable to meet customer liabilities amounting to Rs 6.8 billion representing 5,978 investors, in 2009 due to several reasons, that included loss of confidence among investors, the run on investments, banks terminating lines of credit, negative media publicity surrounding the collapse of Golden Key, borrowers defaulting on repayments and withdrawal of leasing licence.

In this backdrop Ceylinco Shriram appointed Wealth Lanka Management to prepare a payment plan in 2009 to settle customer liabilities.

On the orders of the Supreme Court, the Central Bank evaluated and approved the payment plan in 2010.

Thereafter, the Supreme Court, appointed the Watawala Committee of Chartered Accountants to assist in the payment plan which included Senior Chartered Accountants Prof. Lakshman R Watawala, Nelson Nagasinghe and Mahendra Panditha.

The investors and depositors associations, their lawyers and the company's lawyers with the DSG of the AG's Department agreed on a payment plan to pay 60 percent of the depositors investments or deposits outstanding in May 2010.

The Supreme Court in May 2010 appreciated the fact that settlement has been reached out of Court and the plan has been lodged in Court for orders of the Supreme Court.

The Supreme Court has from time to time, based on the availability of funds, given orders for the implementation of the payment plan in stages as per the reports filed by the Watawala Commission.

“Over 84.5 percent of depositors have been paid 60 percent of the deposits outstanding and in terms of the payment plan and it was agreed to settle 60% of the investors liabilities or deposits over a 60-month period.