Golden Key case:

SC approves tentative Method of Operation

WASANTHA RAMANAYAKE

The Supreme Court yesterday approved the tentative Method of Operation submitted by the Committee appointed to look into the affairs of the Golden Key Credit Card Company.

Two members of the Committee Chartered Accountants Nelson Nagasinghe and Mahendra Panditha tendered the report to the Court. The modus operandi sought to establish a secretariat in the Central Bank headed by a Chief Operational Officer.

The Court appointed with immediate effect J.P.R. Karunarathne, Additional Director, Non- banking Financial Institutions Supervision as the COO. In terms of the tentative method of operation the committee sought to appoint a police officer, an officer from the Inland Revenue Department, an auditor and auctioneer.

The Court directed the committee to compile a list of depositors who had submitted claims. The Court noted that claims received later than yesterday should accompany an explanation out lining the reasons for the delay.

The court directed that the list to be completed on priority basis entering the depositors who were wholly dependent on the returns of the deposits in the GKCCC, who have other incomes and depend on the deposits more than 50% and those who have considerable other income and depend on the returns less than 50%.

The Court also ordered the Monetary Board of the Central Bank to submit the list of names of the directors who had not so far declared their assets to the CB in terms of the Supreme Court order. The Court made the order when Counsel for Petitioner M.A. Bastiansz pointed out that the seventh respondent Ceylinco Chairman Lalith Kotelawela yet to disclose his assets fully.

The Bench comprised Chief Justice Sarath N. Silva PC with Justice Ms. Shirani Thilakawardane and Justice K. Sri Pavan.

Chief Justice Sarath N. Silva PC cautioned the general public that they should have a degree of understanding of the shareholding of any company before investing money. He made the observation when it was pointed out that the issued share capital of the GKCCC was only Rs 700. Senior State Counsel Janak de Silva tendered court the profiles of two companies Golden Key Holding Ltd., and Ceylinco Ltd., who were the main shareholders of the GKCCC.

The Chief Justice also pointed out that the GKCCC had made illegal transactions by buying back his own shares in the Finance Company and transferring them to the Golden Key Holding Company and Ceylinco Ltd.

The petitioners, depositors of the Golden Key company cited 17 respondents including the Monetary Board of the Central Bank, the Governor of the Central Bank, the Secretary to the Treasury, Golden Key Company, Lalith Kotelawela, Khavan Perera, Sicille Kotelawela, the Ceylinco Consolidated Pvt. Ltd. and the Attorney General.

The petitioners complained that the respondent company first stopped the payment of interest on deposits and then the depositors were not allowed to withdraw their deposits, without giving any reason.

They stated that they have learnt that the company directors had been allegedly involved in numerous illegal activities using the money of the depositors. They pointed out that the company had misappropriated around 26 billion rupees of the depositors. The petitioners stated that the failure of the Monetary Board to supervise and control the activities of the respondent company were in violation of their rights.

Senior State Counsel Janak de Silva appeared for the Central Bank.

M.A. Bastiansz with Sudath Jayasundara appeared for the petitioners.

Further hearing put off for July 13.

Meanwhile, the Supreme Court yesterday stayed the winding up proceeding before the Colombo Commercial High Court of F&G Real Estate Ltd., and F& G Property Developers Ltd., two subsidiaries of Finance and Guarantee Ltd.(F& G) Ltd, in a rights application filed by some depositors. The order will be valid until July 13.