Golden Key saga:

Government promises and assets reality

by Dhaneshi Yatawara

The Finance Ministry announced last week that the Central Bank has formulated the modalities to activate the repayment plan for the aggrieved Golden Key depositors. Agreeing on the Supreme Court order to pay 41% of the deposited amount to each depositor, the company has taken these steps following the intervention of the Ministry of Finance.

A protest by Golden Key depositors (File photo) - ANCL Media Library

Finding a solution to the grievances of over 9,000 Golden Key depositors was a pledge given by President Maithripala Sirisena in the 100-day program.

The new Government, in order to solve the long-standing problems that existed in the non-banking financial institutions had stated that it would provide relief to depositors through the intervention of the Central Bank of Sri Lanka and the Finance Ministry.

Special counter

According to the Chief Executive Officer of Golden Key Credit Card Company, Dinesh Perera, a special counter is available for inquiries and any security deposit holder may contact the special counter for clarifications.

The Golden Key Credit Card Company affirmed that they sent cheques for deposits up to Rs. 1 million two weeks ago.

The payment to depositors has been processed and made by drawing account payee cheques in the name of the security deposit holders.

The cheques for depositors up to Rs. 2 million have been posted to their addresses available with the Golden Key Credit Card Company data base.

According to the Chief Executive Officer payments are made by cheque in accordance with the modalities approved by the Supreme Court.

In January this year, all depositors of the Golden Key Credit Card company were given an interim payment of up to Rs 300,000 irrespective of their account balance. Therefore, according to the company, the 41% payment is minus the other payments made so far to the depositors.

The Finance Ministry announced that the depositors will be paid according to the plan from July 24. The Cabinet of Ministers in the third week of July approved the proposal by the Finance Minister to release Rs. 544.3 million of Government funds to compensate the aggrieved depositors in the first tranche.

In a statement issued following a meeting with the Golden Key depositors, the Finance Ministry explained that the funds will be recovered through the liquidation of the assets of Golden Key Ltd. with the permission of the Supreme Court.

The goverment has also decided to settle the dues of those who have deposits below Rs 10 million within the next two months and those above Rs 10 million within one year. Accordingly, a further sum of over Rs 7 billion is needed and the Finance Ministry has proposed that funds for these payments could be recovered from liquidation of the assets of the Golden Key and the profits transferred from the Central Bank.

Despite the Government's pledge, the Golden Key depositors question the possibility of funding the nearly Rs. 7 billion needed for the second tranche.

The Golden Key Depositors Association and Golden Key Depositors Society, the two majority parties of the depositors are of the view that liquidating the Golden Key assets alone will be insufficient.

President, Golden Key Depositors Association, Dushyanthi Hapugoda said with the data they collected during their entire campaign they could not find that amount of assets. "With the termination of the Supreme Court case we have no guarantee," she complained.

Attorney-at-law Hijaaz Hisbullah representing the Golden Key Depositors said the Supreme Court has terminated the case and the solution proposed sometime ago will be implemented.

"With the termination of the case, frozen personal assets of the Golden Key directors were released," he said explaining that his clients well understood that it could happen automatically as the case was terminated.

Real culprits

"But they are the real culprits. My clients need justice and the accused were released," he added.

"There is no way the Government can avoid depositors getting the compensation. If the payments are not made as the Government promised at the highest court of the country, that would be the lowest depths to which this Government would fall.

Dushyanthi Hapugoda said that even though the funds for the second phase or even more could be collected by liquidating the directors' personal assets it cannot be done now.

"The accused have been released and their assets cannot be liquidated to find the money to pay the depositors," she said. President of the Golden Key depositors' Society, Wasantha Gunatilake said over 20% of the depositors who are members of the society are retired people and the majority of them are over 70. Gunathilake said they hope that the government would pay the depositors fairly.

"We suggest that priority should be given to elderly people and those who are with complicated serious illnesses. But the payment should be according to the agreed plan," he said. At present, the Golden Key Depositors' Association and the Golden Key Depositors' Society are making arrangements to file cases at the Colombo Commercial Courts against the Golden Key Company in order to seek justice for the aggrieved depositors, said Hapugoda.