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CIFL: Depositors plan to appeal against recent court ruling
By Quintus Perera
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The CIFL (Central Investment and Finance Ltd) depositors are restlessly awaiting a copy of last week’s Appeal Court decision dismissing their case against the CIFL and the Central Bank (CB) as they want to file an appeal in the Supreme Court (SC).
The dismissal of the appeal paves the way for the CB to go ahead with its restructuring plan unless the depositors are able to move the SC to get a stay order pending determination of their proposed appeal.
Some members of the CIFL Depositors Association (CIFLDA) monitoring the stock market have found one individual, believed to be a politically-powerful government advisor, to be continuously buying CIFL shares in the past few days to the tune of 250,000 shares per day.
In this manner, if this person continues to purchase shares he could be a majority shareholder and later there is a possibility of his coming forward as an investor. One of the CIFLDA members explained that if the person becomes an investor the commitment of the interest thereby paid to the depositor would be low.
The total deposits, he said, is Rs. 3.5 billion and assuming 60 per cent is converted into shares (under the CB plan) the amount so converted is Rs. 2.1 billion with the remainder 40 per cent being Rs. 1.4 billion and this 40 per cent would be the existing deposit base.
At the rate of 5 per cent the interest commitment would then be Rs. 70 million only. So, he said, that any investor who makes a low investment will benefit from these flaws.
Then that means, the CIFLDA member pointed out. the deposit liability could be brought down and the interest commitment would then come down, making it an investor-oriented plan and not a deposit-oriented one. He said that thus, whoever who now purchases large chunks of shares at such low rate as 60 cents per share could be working on an agenda set by the authorities.
Meanwhile M.A. Gunasinghe, Administrative Secretary, CIFL Depositors Association (CIFLDA) said their committee met on Monday and confirmed the plan to appeal against the Appeal Court decision.
One depositor, H R Perera, an attorney-at-law himself from Dehiwela, has filed a private plaint at the Fort Magistrates Court to recover his deposit of Rs 1.5 million and the interest thereof as the maturity period is over.
He said the CIFL has failed to pay the capital plus the interest. He said that at the last date the case could not be heard as the summons could not be served and he obtained a further date.
Mr. Perera told the Business Times that several of the CIFL depositors have complained to the police to recover their money and the police is awaiting the Attorney-General’s decision to proceed with prosecutions.
P. K. Mahindapala, Secretary, CIFLDA said that they are in search of genuine investors to finance the failed CIFL and once such investors are found they would be routed through courts. To resolve all these matters they would be summoning a general meeting of all the depositors very soon.
The Business Times is inundated with pathetic woes of these desperate persons, most of them ailing old people, and with their means of living lost, their end appears to be etched in their faces.
By Quintus Perera
View(s):
The CIFL (Central Investment and Finance Ltd) depositors are restlessly awaiting a copy of last week’s Appeal Court decision dismissing their case against the CIFL and the Central Bank (CB) as they want to file an appeal in the Supreme Court (SC).
The dismissal of the appeal paves the way for the CB to go ahead with its restructuring plan unless the depositors are able to move the SC to get a stay order pending determination of their proposed appeal.
Some members of the CIFL Depositors Association (CIFLDA) monitoring the stock market have found one individual, believed to be a politically-powerful government advisor, to be continuously buying CIFL shares in the past few days to the tune of 250,000 shares per day.
In this manner, if this person continues to purchase shares he could be a majority shareholder and later there is a possibility of his coming forward as an investor. One of the CIFLDA members explained that if the person becomes an investor the commitment of the interest thereby paid to the depositor would be low.
The total deposits, he said, is Rs. 3.5 billion and assuming 60 per cent is converted into shares (under the CB plan) the amount so converted is Rs. 2.1 billion with the remainder 40 per cent being Rs. 1.4 billion and this 40 per cent would be the existing deposit base.
At the rate of 5 per cent the interest commitment would then be Rs. 70 million only. So, he said, that any investor who makes a low investment will benefit from these flaws.
Then that means, the CIFLDA member pointed out. the deposit liability could be brought down and the interest commitment would then come down, making it an investor-oriented plan and not a deposit-oriented one. He said that thus, whoever who now purchases large chunks of shares at such low rate as 60 cents per share could be working on an agenda set by the authorities.
Meanwhile M.A. Gunasinghe, Administrative Secretary, CIFL Depositors Association (CIFLDA) said their committee met on Monday and confirmed the plan to appeal against the Appeal Court decision.
One depositor, H R Perera, an attorney-at-law himself from Dehiwela, has filed a private plaint at the Fort Magistrates Court to recover his deposit of Rs 1.5 million and the interest thereof as the maturity period is over.
He said the CIFL has failed to pay the capital plus the interest. He said that at the last date the case could not be heard as the summons could not be served and he obtained a further date.
Mr. Perera told the Business Times that several of the CIFL depositors have complained to the police to recover their money and the police is awaiting the Attorney-General’s decision to proceed with prosecutions.
P. K. Mahindapala, Secretary, CIFLDA said that they are in search of genuine investors to finance the failed CIFL and once such investors are found they would be routed through courts. To resolve all these matters they would be summoning a general meeting of all the depositors very soon.
The Business Times is inundated with pathetic woes of these desperate persons, most of them ailing old people, and with their means of living lost, their end appears to be etched in their faces.
