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The remaining Directors of troubled Central Investments and Finance PLC (CIFL) in a scathing attack yesterday, alleged that the former Central Bank Governor Ajit Nivard Cabraal ignored all the revival proposals which were put forward by them in 2013.
Four remaining Non Executive Directors of CIFL, Lakshman Rupasinghe, P.V. Pathirana, D.J.D. Jayakody and H.G.A.P. Samarasinghe, in a letter to the Central Bank Director of Non Banking Financial Institutions Supervision Mrs. N. Daulagala yesterday, said:
" All our revival proposals made above were ignored by the Governor and the Director NBFIS of the CBSL and proceeded with the appointment of Roscoe Maloney and 2 of his nominees to CIFL board by their letter dated 3 May 2013
They also alleged that the appointment resulted in Roscoe Meloney becoming the Chairman of the company and 'our' CEO resigning his position.
"We were forced to continue on the Board, obviously in non executive capacity. The asset recovery process completely halted because they became the owners of the entire group and took over the management of CIFL," the letter said.
Meloney family managed CIFL for almost two months but did not infuse any capital, but managed to sell one block of land in Beragala and the share portfolio against our objections in the Board. We have not seen the minutes of the said board meeting......because the company secretaries did not provide the minutes of the board meeting to us for approval. The CBSL did not take any action against them, but decided to appoint People's Leasing and Finance PLC (PLC) as the managing Agent of CIFL, making all the existing directors Non Executive, by their letter dated 1 July 2013.
We were in fact surprised about the ignorance of the former Governor (Cabraal) and the Director NBFIS about the bad reputation of the Chairman of Touchwood in financial circles without verifying the financial background or checking about their financial capability to invest USD 12 Million promised. On this basis, we even recommended to organize a meeting with them and to force them to infuse their capital and if they fail to do so, to consider a short term facility under deposit insurance scheme funds by keeping the value of CIFL shares owned by this investor as security for such advance.
Although we did not get any response to this request, the Central Bank proposed the 'liquidity support scheme' to troubled finance companies almost 6 months after our proposal and granted
Rs 6 Billion to another finance company, while our company remained in the same situation.
In our opinion, the CBSL repeated the previous mistake by appointing PLC, particularly in an Honourary capacity. This was a 'repeating of history' of the case of previously failed Finance Company Industrial Finance Limited, which was also owned by the same owner Deepthi Perera) We pointed out many losses incurred due to the negligent attitude of PLC to the Director NBFIS, but they did not even listen to the former Governor to deploy a full time CEO to CIFL.
We maintained the position that it was a violation of the Monetary Board decision of making us non executive directors, if we get involved in executive capacity although both PLC and even CBSL officials misinterpreted the wording of this direction, the CIFL Directors' letter to the Central Bank said.
Courtesy: Ceylon Financial Times 22 May 2015
Four remaining Non Executive Directors of CIFL, Lakshman Rupasinghe, P.V. Pathirana, D.J.D. Jayakody and H.G.A.P. Samarasinghe, in a letter to the Central Bank Director of Non Banking Financial Institutions Supervision Mrs. N. Daulagala yesterday, said:
" All our revival proposals made above were ignored by the Governor and the Director NBFIS of the CBSL and proceeded with the appointment of Roscoe Maloney and 2 of his nominees to CIFL board by their letter dated 3 May 2013
They also alleged that the appointment resulted in Roscoe Meloney becoming the Chairman of the company and 'our' CEO resigning his position.
"We were forced to continue on the Board, obviously in non executive capacity. The asset recovery process completely halted because they became the owners of the entire group and took over the management of CIFL," the letter said.
Meloney family managed CIFL for almost two months but did not infuse any capital, but managed to sell one block of land in Beragala and the share portfolio against our objections in the Board. We have not seen the minutes of the said board meeting......because the company secretaries did not provide the minutes of the board meeting to us for approval. The CBSL did not take any action against them, but decided to appoint People's Leasing and Finance PLC (PLC) as the managing Agent of CIFL, making all the existing directors Non Executive, by their letter dated 1 July 2013.
We were in fact surprised about the ignorance of the former Governor (Cabraal) and the Director NBFIS about the bad reputation of the Chairman of Touchwood in financial circles without verifying the financial background or checking about their financial capability to invest USD 12 Million promised. On this basis, we even recommended to organize a meeting with them and to force them to infuse their capital and if they fail to do so, to consider a short term facility under deposit insurance scheme funds by keeping the value of CIFL shares owned by this investor as security for such advance.
Although we did not get any response to this request, the Central Bank proposed the 'liquidity support scheme' to troubled finance companies almost 6 months after our proposal and granted
Rs 6 Billion to another finance company, while our company remained in the same situation.
In our opinion, the CBSL repeated the previous mistake by appointing PLC, particularly in an Honourary capacity. This was a 'repeating of history' of the case of previously failed Finance Company Industrial Finance Limited, which was also owned by the same owner Deepthi Perera) We pointed out many losses incurred due to the negligent attitude of PLC to the Director NBFIS, but they did not even listen to the former Governor to deploy a full time CEO to CIFL.
We maintained the position that it was a violation of the Monetary Board decision of making us non executive directors, if we get involved in executive capacity although both PLC and even CBSL officials misinterpreted the wording of this direction, the CIFL Directors' letter to the Central Bank said.
Courtesy: Ceylon Financial Times 22 May 2015
