Golden Key Task Force can seize and sell

The Supreme Court today granted permission to the Board of Directors (Task Force) appointed by Court to give effect to the seizure and sale of assets of the Golden Key Credit Card Company Ltd. with the subsidiary assets of former Directors.

The Bench comprising Chief Justice Mohan Peiris, Justices K. Sripavan and Rohini Marasinghe made this order after considering the Progress Report submitted by the Task Force.

During the hearing that went on for more than one-and-a-half hours, the court heard submissions by each party to the case including the ‘would be’ intervenient petitioners.

At the start, CJ Peiris told court that he intended on ending the case in the next “one or two hearings”.

Thereafter having heard the submissions made by the Task Force Chairman and former Central Bank Deputy Governor Priyantha Fernando, the Chief Justice asked how long the entire process would take.

“We are hoping to finish it before the end of 2014,” Mr. Fernando informed court.

Counsel V.K. Choksy appearing for the Task Force informed the court that the assets were valued between seven and eight billion rupees and that after the sale of assets and shareholdings there would be a balance of Rs.7.1 billion for the repayment of 40% to the depositors.

Thereafter, following submissions made on behalf of a Swiss investor Patrick Schegg and the Swiss investment Company Pictet and Cie and the City Bank, the Chief Justice informed all parties objecting to the credentials of Patrick Schegg presented by Kanag Iswaran PC to direct them to the Task Force.
He also informed the Attorney General’s Department to submit the report prepared by the SEC and the Financial Investigation Unit on the Swiss Bank and the CIESOT trust fund, within the next two weeks.

At the start of the hearing, Petitioners’ Counsel Dr. M Zafrulla informed court that the CIESOT trust fund was a “sham and did not connote an express trust”.
Employees’ Counsel Faizer Musthapha PC and Ali Sabry PC told court that the Trust was not a “sham and that the beneficiaries were the employees whose rights were affected by your recent order”.

The Chief Justice shot back at Sabry asking him if he believed what the Directors of Ceylinco Insurance had said.

CJ: “It’s a simple question, do you believe that what the directors are saying is true or not?”

Sabry: The beneficial interest….

CJ: No it’s a black and white question do you believe if it’s true or not?

Sabry: Yes I do,

Thereafter The Chief Justice said he was entertaining submissions by the intervening parties as a matter of courtesy, and that no intervening party would be permitted in the case.

CJ: We believe that everything said here is bona fide, if the court finds that there is any hand behind any of this (the intervening petitioners) we will deal with them in the strictest manner.

Thereafter the court directed the counsel to make representations to the Task Force.

The CIESOT trust fund possesses more than six billion rupees in funds, which the Task Force intends to sell and settle depositors. Parties present asserted that the fund was a mechanism used to perpetuate the control of Ceylinco Insurance by its Directors and the employees were in fact not beneficiaries as per the trust deed.

“If it happened everywhere else then that is wrong. Two wrongs don’t make a right” the Chief Justice said when Sabry informed that many companies had adopted the same share mechanism.

The matter was listed to be mentioned on July 7 with the consent of the parties concerned. (S.S. Selvanayagam)