GKCC: Hope for depositors from the SC? - Sri Lanka Guardian

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Monday, October 31, 2011

GKCC: Hope for depositors from the SC?

| BUSINESS EDITORIAL

(October 31, Colombo, Sri Lanka Guardian) We are happy the role we played to bring the plight of the 7,000 plus GKCC Depositors to the attention of the higher levels of government is hitting home. This week the Chief Justice herself Hon'ble Shirani Bandaranaike took a firm stand on the perplexing delay in reaching a settlement. When the matter came up before the Supreme Court (SC) recently, the Chief Justice - clearly noting the inordinate delay - observed there should be some urgency in the matter by the time Courts go into vacation by the first week of December.

The proposal made by lawyers to
Lalith  Kotelawala  Interest should be
calculated at 6% from the date of
deposits until December 2008 is unfair
 by the depositors. This, in many cases, 
will eventually result in the depositors
 having to pay back GKCC.
While the government and its many spokesman tell the country and the world Sri Lanka has been made attractive to foreign FDIs and increasing local investment, Prof Sunil Watawala informs the SC GKCC's assets - like the ENT Hospital and other valuable real estate - have not attracted the interest that would have been the evidence of a vibrant economy. This tells the actual story of the real state of the fiscal state of the country. Besides, it appears the SC has not been provided with a list, including value, of assets held by GKCC when it collapsed in December 2008. The speculation is the value of these in actual terms that day was far in excess of the current due of Rs.29 billion. How and the dates in which some of these valuable assets changed hands, how large sums in deposits were surreptitiously withdrawn by directors and key officials of the Ceylinco Group will expose many scandalous deals.

The proposal made by lawyers to Lalith Kotelawala Interest should be calculated at 6% from the date of deposits until December 2008 is unfair by the depositors. This, in many cases, will eventually result in the depositors having to pay back GKCC. The reality is many of them were meeting their monthly home expenses via the interest from their deposits. A fairer solution, we would assume, is to arrive at an aggregated rate of around 12% upto the date of settlement.

Prof Watawala's Committee also appears to have taken far too long in coming out with their final Report. The reason may have been the somewhat high salary of Rs.200,000 plus expenses per month they have paid themselves and it, therefore, follows the longer it takes to file the report the more lucrative for them. If that much hyped Corporate Responsibility factor was to have played a part in this matter - that involved the life and death of hundreds of thousands - these accountants should have done their part sans any emoluments.

While it is astonishing is this high-profile matter has escaped a resolution despite the passage of nearly 3 years, the new development the SC at its highest level is calling for early and, hopefully, a more reasonable formulae of resolution - will be welcome by the 7,000 depositors condemned to near poverty from the heights of the comforts of the middle class lives that was their lot for them and their families when they entrused the good name of the Kotelawalas with their entire lives savings. Interestingly, while Rupert Madoff spends his days behind bars in New York Lalith Kotelawala spends his days in comfort and spendour in his sprawling villa - with the occasional live rock band providing him the pleasure of his favourite ditties in airconditioned comfort in Colombo. Surely, a different kind of Tale of Two cities.


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