Touchwood Group Chairman Roscoe Maloney and wife have stepped in with an investment of US$ 12 million and the board of directors of the CIFL will be re-constituted with three Maloney nominees, CIFL Chairman Lakshman Rupasinghe told the Business Times. He said a board meeting will be held tomorrow approving the deal with the new investors.
The Touchwood group has acquired the Aspic group along with its nine subsidiaries including the CIFL and it has given an assurance to the Central Bank to bring highest standards of business management concentrating more on micro financing and SME loans.
Mr. Rupasinghe said that a considerable number of depositors recently withdrawn their deposits on maturity without extending it to a further period and it has eroded the deposit base of 5000.
The termination of former CEO Jayanth Wickremaratne following a Central Bank investigation prompted the run on deposits as most of these depositors kept faith in him, he added.
The CIFL had to operate on interest on loans, micro financing and leasing income income due to withdrawal of deposits and the inability to attract new deposits during the past two months saw a delay in interest payment for some of the depositors, he said. The Central Bank has intervened to bail out the company and the Governor has given his consent to allow the Maloneys’ capital infusion, he revealed.
Meanwhile more than 13 complaints were lodged by depositors at the Slave Island police station as at 28th March alleging that CIFL has failed to meet its monthly interest payment deadlines to some of its depositors.
Depositors also complained that they have received no proper explanation as to the reasons behind the delay and stated that CIFL has requested for an extended deadline to settle its monthly dues.
“I have invested my life savings of Rs.1.5 million at CIFL and they are procrastinating my interest payments without any meaningful explanation”, a depositor who wished to remain anonymous told a Business Times reporter at the Slave Island police station last Thursday. For this depositor, a driver by profession but being unemployed on medical grounds, the monthly interest payments from CIFL are his only source of income.
He also alleged that the CIFL has requested assistance in the form of a loan from the CB to meet their financial commitments to its investors and that attempts made by depositors to meet Chairman Lakshman Rupasinghe were turned down.
The Slave Island Police told Business Times that they have recorded statements from officers attached to CIFL including a senior manager T.S Weerakoon.
Speaking to the Business Times Mr. Weerakoon attributed the delay in payments to a technical issue associated with an Indian Software system being used by CIFL.
Police also stated that attempts made to record statements from certain executive officers at CIFL were unsuccessful as the executives concerned were avoiding phone calls.
According to the Slave Island police some depositors who lodged complaints intended to use their interest payments for medical and educational pursuits.
(Additional reporting by Sachin Parathalingam).