Sun, 25 Jul 2021 Today's Paper

CB to take stern action against fraudsters of failed finance companies

6 December 2017 10:01 am - 0     - {{hitsCtrl.values.hits}}

A A A

Central Bank yesterday said every effort would be made to take legal actions against those who are responsible for the frauds and misuse of depositors’ funds of three failed finance companies.The Monetary Board of the Central Bank last month issued a notice of cancellation of the licence issued to Central Investments and Finance PLC 

(CIFL) to carry on finance business under the Finance Business Act. No.42 of 2011.


However, With regard to the Standard Credit Finance Ltd. and City Finance Corporation Ltd. the Monetary Board has not issued notices of cancellation as there are legal issues to be resolved with regard to those two companies.


“CIFL was confronted with severe liquidity crisis since 2013 due to mismanagement and other irregular transactions carried out by the management of that company. 
It has also been observed that the directors and senior management of these companies have fraudulently inflated the value of the assets and the examination of the documents relating to such assets has revealed that those are either fictitious or entangled with encumbrances,” the Central Bank said. 


CIFL was not in operation since 2014. During this period, the Central Bank had discussions with local and foreign institutions/ individuals who expressed their interest in investing and reviving the company.   


The Central Bank yesterday said the revival plan needs at least Rs. 3 billion investments and at least 30-40 percent of the deposits should be repaid immediately as they had not been paid interest or the capital of their deposits for the last 4-year period. 


At the same time, it was stressed that the investors should be credible and the funds should be transferred to Sri Lanka through legal channels, in the case of foreign investors. The total deposit liability of the CIFL stands around Rs. 3.5 billion and the number of depositors is 4,092. Of those, 2,501 depositors are with deposits less than Rs. 600,000. 


As per the present regulations, maximum amount that can be paid under Sri Lanka Deposit Insurance and Liquidity Support Scheme is Rs. 300,000. 
However, the Monetary Board having considered the plight of the small depositors has decided to double the compensation from Rs. 300,000 to 
Rs. 600,000.


“Accordingly, in the case of CIFL, 61 percent of the depositors will be fully settled with their deposits,” the Central Bank said.


However, the Central Bank noted that the depositors and the other stakeholders of CIFL has the right to submit their objection to the Monetary Board within the time period mentioned in the Finance Business Act No. 42 of 2011 under which the cancellation notice was issued.

 

 

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

  Comments - 0

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 


Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment


Basil Rajapaksa’s catch 22 situation

Sri Lankan politics has been a good deal of family business. It was not even

“This govt. printed Rs. 880 billions”

This is the roadmap of Zimbabwe

“We are on the cusp of a mothers-led movement for better birth rights in Sri Lanka” – Kanya D’Almeida

Writer Kanya D’Almeida became the first Sri Lankan to win the ‘Commonweal

Two diametrically opposite shows in a military regime

On July 8 (Thursday) we saw diametrically opposite results because the securi



See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.