ETI depositors pledged part payment | Sunday Observer

ETI depositors pledged part payment

The government will ensure a maximum payment of Rs. 600,000 per depositor of the finance companies coming under Edirisinghe Trust Investment (ETI) Finance Limited and Swarnamahal Financial Services Limited.

This maximum amount will be covered by the deposit insurance scheme maintained by the Central Bank of Sri Lanka and monies that are being raised through a foreign investment and sale of personal assets belonging to the directors of ETI.

State Minister of Finance Eran Wickremaratne revealed these figures in Parliament last week answering a question raised by the Chief Opposition Whip Anura K. Dissanayake regarding the steps being taken by the Government to resolve the depositors’ woes.

Minister Wickremaratne revealed that while ETI Finance Ltd and Swarnamahal Financial Services PLC are regulated by the Central Bank, another company of the EAP Group, Swarnamahal Jewellers Private Limited had accepted deposits without it being licensed to do so, while ETI Finance Limited had maintained a second secret book accepting deposits that were not revealed to the Central Bank.

In 2012, a former accountant at the People’s Bank, S. Kariyawasam was brought in by the EAP Group to carry out a management audit of the Company and it was Kariyawasam who discovered the mismanagement and unauthorised deposits and approached the Central Bank under its former governor Ajith Nivrad Cabraal to resolve the issue.

Cabraal, sources said, had shown “great latitude” to the EAP Group and allowed them to function without any impositions being placed on the Group despite a clear indication of misstatement and possible collapse of the company.

In August 2015, following an in-depth investigation carried out by the then governor Arjuna Mahendran, the Central Bank ordered the Directors of the Group to bring in capital worth Rs. 13.68 billion by raising new capital and by transferring the personal assets of the directors to the company.

At the same time, Mano Tittawela, former banker and State sector employee, was appointed as the CEO of the EAP Group and was put in charge of the recapitalisation of the Group. Today, Tittawella is the Chairman of the Public Private Partnership unit at the Ministry of Finance.

According to Minister Wickremaratne’s statement, while these moves stabilised the situation within the EAP Group to a certain extent, the Directors had not taken any further steps to normalise the mismatch between assets and deposits.

While the Department of Supervision of Non-Bank Financial Institutions of the Central Bank had been sending constant reminders and warnings to the Group, Minister Wickremaratne pointed out that the Directors have been unable to restructure the business.

On January 2, 2018, after establishing that the Group cannot pay back the depositors, the Central Bank appointed three retired bankers with specialised bank and finance knowledge to administer ETI and Swarnamahal Financial Services and took steps to extend the maturing deposits by six months while paying interest and allowing withdrawals from savings accounts.

Meanwhile, proposals were received from several possible suitors, of which, following due diligence, a proposal from Singaporean company, Blue Summit Capital Management Limited, registered in Singapore in January this year as a shelf company with two directors within the registry, Don Cyril Rodrigo and Qandeel Omar Siraj, to invest US $ 75 million in two tranches, was accepted by the CB.

Of this amount, Minister Wickremaratne said, US $ 32 million has been deposited with the Central Bank and this money will be used to pay back 10 percent of the depositor’s fund by next month.

The remaining tranche of US $ 43 million is expected to come in by the end of July and another 10 percent of the depositor’s funds will be met through this payment.

However, Minister Wickremaratne pointed out that this money and the sale of the directors’ personal assets will only cover less than one-third of the total outstanding deposits and that the Government will only be able to meet up to a maximum of Rs. 600,0000 per depositor. 


It will also be helpful, if the minister could intervene on behalf of all the fixed deposit holders of the Ceylinco group of companies - Golden Key, The Finance, Ceylinco Global Profit Sharing Investment Corporation etc., also be addressed. This fraud happened 9 years ago and many have committed suicide - This was the work of the then Governor of the Central Bank - Nivard Cabraal and the opportunity grabbed by Lalith Kotelawala.