30 September, 2020

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The Failure Of The Central Bank, The Golden Key Curse And The Fall Of A Chief Justice

By Lakshman I.Keerthisinghe –

Lakshman Keerthisinghe

O cursed lust of gold, to what canst thou compel the heart of man! –  Virgil Aenid(Greed)

The Supreme Court of Sri Lanka in its order of 23.03.2009 granting leave to proceed in SC Applications filed by some depositors of the Golden Key Credit Card Company stated thus: ‘On a perusal of the file… it was revealed that Folio …containing report of the Head of the Special Investigation Unit (S.I.U.) of the Central Bank which had considered the very matter raised by Counsel for the petitioners ..has stated as follows:-‘In view of the above facts the examiners are of the view that the Golden Key Credit Card Company Limited carries on a finance business in contravention of the provisions of the Finance Act No.78 of 1988’.The files that have been produced do not indicate with any clarity the action that has been taken thereafter. , However there is a report to the Monetary Board dated 24.11.2006 which culminates as follows: ‘The Monetary Board is informed of the above and is invited to approve a discontinuance of the examination commenced in respect of the Golden Key Credit Card Company under Section 11 of the Finance Companies Act.’ The Supreme Court further held that  : ‘This Report does not give any reason for disregarding the findings in the Report of the Special Investigation Unit but refers to certain discussions had with the Chairman of the Ceylinco Group. It appears that the subsequent course of action has resulted entirely on the basis of these discussions had with the Head of the very institution which was being investigated.’ The bench headed by the then Chief Justice Sarath N Silva comprised of Hon.Justice Shiranee Tilekawardene and Hon Justice K,Sripavan as the other two judges.

It was reported in the media that the Central Bank is attempting to hide its failure in duty by stating that they had placed advertisements warning people not to deposit money in unregistered finance companies. It is ridiculous to hide behind such an excuse when the Central Bank is charged with a legal duty to supervise non banking institutions and prohibit illegal operations of such companies as reported by the S.I.U. The officers who ordered the discontinuation of the examination of the   Golden Key Credit Card Company should face investigation and punishment for the misery they brought upon thousands of depositors. Thus it is evident that the Monetary Board of the Central Bank chaired by the Governor failed to act by prohibiting the operation of the said fraudulent Company thereby bringing misery to thousands of depositors who deposited their hard earned monies including their EPF and ETF Funds, money obtained by the sale of their only residential houses and properties in view of the high interest rates offered by the said Company headed by the fraudster Lalith Kotelawala, who is retaining the Deshamanya title and presently enjoying a luxurious life style being out on bail whereas the other fraudster Sakvithi having defrauded a very less number of depositors for a much less sum of money is languishing in jail along with his wife whilst his two innocent children are in the care of probation officers. Mrs.Cecilia Kotelawala is in England and the British Government recently issued a statement that as the Sri Lankan Government has not asked for her extradition they are not pursuing the matter although there is a warrant out for her arrest in connection with the Golden Key Fraud. It must be noted that the Central Bank is placed directly under the purview of the Head of State who is also the Minister of Finance. Due to the failure of the Monetary Board to perform its legitimate functions in prohibiting the operations of the said Company thousands of Sri Lankan citizens and their families are suffering in utter misery. While these depositors were from time to time assured of relief by the Head of State that relief appears to be very slow in coming although the matter was highlighted by the Government to oust the Chief Justice Dr.S.A.Bandaranayake. One Cabinet Minister unashamedly referred to the Chief Justice as a thief (hera in Sinhala) during the impeachment debate in the Parliament. This statement may go down in world history as the first occasion at which an incumbent Chief Justice of any country was referred to by a Cabinet Minister in such derogatory terms in the Parliament of any country. But as stated n the Bible Exodus Acts 7:35 Who made thee a ruler and a judge over us?’ would have been a proper question to pose in response to that statement. Then again it is the people of Sri Lanka who send elected representatives to Parliament but the legislators are tasked with the making of laws and not in passing judgement over citizens, which is strictly a judicial power.

Be that as it may there is also another aspect that has to be considered. It was also reported sometime ago  in the media that in an order of the bench headed by the Chief Justice Dr.S.A.Bandaranayake, the Supreme Court in a case filed for the vindication of the fundamental rights of the depositors of the Golden Key Credit Card (GKCC) Company who were about to receive repayment on the proceeds of the sale of the Golden Key Eye Hospital suffered a terrible set back when the matter was reverted to the Commercial High Court (CHC) thereby thousands of depositors and their families who were anxiously hoping for repayment, at least partly, in time for the Sinhala and Hindu New Year lost that opportunity. Counsel representing a depositors’ association submitted to court that the case can be referred to the CHC after the three assets are disposed of and a part settlement made to depositors. Cases in the CHC drag on for a long time. Justice delayed is justice denied. For the past one and half years, not a cent had been repaid to GK depositors. In any event as the Supreme Court is the final appellate Court the matter would eventually end up in the Supreme Court after protracted litigation by which time the elderly depositors who had invested their EPF and ETF funds in Golden Key in the hope of leading a comfortable life in the evening of their lives would have gone to their graves after spending their last days in misery. The echoes of their mental agony would reverberate on the living, who were either architects or contributed to the non refund of their hard earned money thereby resulting in their misery falling upon such persons and their families without a doubt. In the absence of judicial intervention, divine intervention would undoubtedly ensure punishment to such wrongdoers. “We are shattered”, said Ms. Dushanthi Hapugoda, President of the All GKCC Depositors’ Association. “We thought we will receive at least another LKR 100,000 repayment to meet the pressing needs of our children during the forthcoming New Year”, “What a battle it was for three long years – we didn’t even have time for our personal commitments. We had to struggle and struggle in search of justice”, she said. It was reported that a buyer for the ENT hospital was present in court with his lawyer and was prepared to place a non refundable deposit of USD 1 million within four days and pay the balance before April 30 that year with the permission of the Court as the Court had earlier ordered that the assets be advertised for sale, in the local media..Prof. Lakshman R. Watawala, Chairman of the Committee of Chartered Accountants said that LKR 1.4 billion can be raised if the three key assets are disposed of. This will enable a repayment of at least LKR 200,000 each to depositors. Ms. Hapugoda said that more than LKR 200 million has been spent on the Committee to carry on its work. The three members are paid LKR 200,000 each per month. “There are buyers for some of the GK assets. What we plead for is to sell these assets and make at least a part payment to desperate depositors, some of whom have already committed suicide in despair”, she said. In an earlier media report it was stated that the Celestial Residencies, another Ceylinco property was to be acquired by the State without any repayments being made to the depositors whose money had been invested in the property. When the Supreme Court had earlier ordered the advertising of these assets for sale thereby spending the money of the poor depositors to meet the advertising costs the above order came as a surprise to the hapless depositors. The Chief Justice was charged with accepting a Rs.1.6 million rebate from one of the companies belonging to the Ceylinco Group in purchasing a property for her sister. This could easily be construed as conduct unbecoming of a judge in dealing with a property that came within the purview of a case on which such judge was required to adjudicate.

As Kautilya said in his Arthashastra speaking of the King or the ruler:‘a king with a depleted treasury eats into the very vitality of the citizens and the country.’ At the same time ‘a king, who impoverishes his own people or angers them by unjust exactions will also lose their loyalty.’ Kautilya further stated ‘impoverishment, greed and dissatisfaction are engendered among the subjects, when the king:(i) fails to give what ought to be given and exacts what he cannot rightly take;(ii) does not punish those who ought to be punished but punishes those who do not deserve to be;(iii) indulges in wasteful expenditures, destroys profitable undertakings and (iv) fails to protect the people from thieves and robs them himself.

Even at this late stage if His Excellency the President as the Minister of Finance admits the failure of the Central Bank and intervenes to grant solace to the depositors it would be a blessing as this would avoid the curse of the Golden Key falling upon others as it did on the fallen Chief Justice of Sri Lanka.

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Latest comments

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    Depositers who danced and ate kiribath for the ouster of CJ SB will have to eat parippu from the govt and Cabral. By going behind politicians they have ruined their chances for a settlement. The real culprits are the govt and CB who will get away with their loot plus profits.

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      Please do not try to divert the attention of the law and public from LK to CB. Let LK and the Cicilia K to pay for the harm they did for the country. Still Cylinco has enough assets to make a full payments to the culprits

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    The advertisements placed by CBSL, referred to here, were to warn potential depositors on a Ponzi Scheme that was then vigorously pursued by powerful men in the Govt. The name of a key political
    official in the CBSL, with established high regime support,was mentioned. The 9,000+ depositors continue to suffer despite many assurances. Some died of anxiety and worry while a few committed suicide. Basil R and MP Sumathipala recently came forward to cause
    relief to these defrauded people. Kotelawala, Kavan Perera, Mrs Karunanayake and a host of Directors continue to live luxuriously – with the law doing sweet nothing. What are those powerful VVIPs in the Govt – followers of the Compassionate one doing? Some have helped their friends and the near and dear to corner some of these valuable assets at give-away prices. As the writer says there appears to be a curse here – that nearly consumed the earlier CJ. This fear is enough for the superstitious Rajapakses to play safe.

    I know some details because I know some neighbours whose lives were ruined by this enormous racket of the egoist Lalith K. They have lost their 2 new cars and their earlier upper middle class life.
    They are now roughing it out – as they say.

    Senguttuvan

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    Will we be able to see another Kiribath session in front of CB Governer’s home? People who went behind quick money. Again misled with quick promoses.

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    “KING CAN DO NO WRONG” is a golden-key saying misinterpreted by the King due to his ignorance coupled with his arrongance and greed for unearned gold.

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    What ever said and done,negotiating for these apartments had to be done ,with the same people defending them selves in the GK case. So the CJ was in a bargaining position in a negotiation for a discount.
    Technically correct or not , throwing away the case was inhumane. She was rewarded with a Ditta dhamma wedaniya karma.
    The president was apparently given 640,000,000 of these money’s by the Goo Kotalawela. If you unknowingly purchase stolen goods , when you know it is stolen ,you are required by law to return it. This is our president, he should feel for those people , whose money’s Goo K distributed, F’ed around with and, bought big houses with etc. set an example , and say” I am so sorry, my beloved countrymen who, lost their money, by investing in a scam even, my Central bank Governer, shoved the report under the carpet and encouraged fraud, so I am setting and example ,I am giving these money’s back to the depositors from the presidents fund!!!”
    I think the depositors have stolen, if not in this birth , in a previous birth. Some may have been Cabinet ministers some little junior ministers as some lost big time. Some lost a little.

    Dushantha was wrong to have gone and made a fool of ,all depositors by climbing trees and ,behaving like a hooligan .
    Sumathipalaand and Basil used them . Now I hope at least Hennayaka of Kiribath fame, will push to save Dushyanthis face!!!!

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    Ms. Dushanti Hapugoda – The President of the Golden Key Depositors Association: Do you at least now understand the “hidden facts and identify the real people who are responsible” for this calamitous episode? I know you were a busy body during the Impeachment of the CJ and received so much prominance from the Government Media units and infact appeared as a “Supper Star” of the day. Now, where are you? and what have you got to say? We like to hear your voice. Please do speak. I suggest you to write to CT. They will publish it with all due honour to you.

    This Golden Key Company,would have been subjected to “Audit Inspections and Reporting” by qualified, registered Accountants or Firms, for so many years of its existence. Are they not responsible for wilfully and deliberately falsifying the true financial standings of the Company? They too must be held responsible and accountable for misrepresentation of facts and misleading the depositors. Why are they left out from any legal action? They too should be brought to book.

    I have written many times in regard to the colossal waste of money paid to the Watawal Committee and still it is paid at the rate of, I believe, Rs. 200,000.00 per month per person. This is nothing compared to what is happening in Sri lanka. So carry on regardless.

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      The 200000 was paid by the Thilakawardana lady who was bullshitting . She brought Watawela there and dragged the case for all these years . My mother lost her EPF money I know this case.

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    Adding to the comments of reader Douglas, if that Committee of Chartered Accountants have helped themselves to as much as Rs.20 million or whatever till now – it will be good if they consider
    returning whatever they have taken. Consider, they did not come out with a resolution to bring relief to the nearly 10,000 depositors.
    They are, after all well-to-do Professionals who, presumably, have other sources of substantial income to live on other than from the miseries of those rendered into near-poverty for reasons not of their own making.

    After all, there is much talk of Corporate Social Responsibility (CSR) hyped about quite a bit in the professional landscape. It is time these well-heeled gentlemen did some volunteer social service and earn for themselves some well-earned “pin”

    Senguttuvan

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