Ceylinco Shriram settles 60% of outstanding in cash to 88% of depositors
Monday, 23 June 2014 00:00
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Setting precedence and an example in the Sri Lankan financial sector, Ceylinco Shriram has successfully managed to make payments in cash to 5,084 of its investors, representing 87.7% of the total 5,796, amounting to over 60% of their deposits, as at April 2014.
This was achieved with the seventh tranche of the repayment process, which was completed in April 2014. The seven repayments totalled a mammoth Rs. 2.8 billion, all of which was settled in cash.
The balance 714 depositors, who represent 12.3% of the total, received cash payments up to Rs. 1.3 million per person. The payments have been made in conformity with the payment plan submitted by the Board of Directors of Ceylinco Shriram to the Courts and investors.
The payment plan was formulated, with the interest calculated up to the time of preparing the settlement plan, and included in the repayment amounts, according to a reliable source. In February 2014, the Supreme Court too expressed its appreciation, saying that it recognised this as the best repayment plan implemented so far in Sri Lanka for failed financial and non-financial institutions, and placed on record, the enormous assistance given to the Court by all the parties involved, including the Central Bank, the depositors, the committee of Chartered Accountants, and the directors of the company.
From the Celestial Towers project, being the biggest asset which was in possession of the company, a staggering Rs. 800 million is due to Ceylinco Shriram, as repayment of the loan given to them, along with the interest due for this loan. This amount was to be utilised to settle depositors, as proposed in the repayment plan.
In addition to the said loan given to Celestial Towers, 55% of the ownership of the Celestial Tower project was held by Ceylinco Shriram companies. If this stake could be realised at the present market value, the entire amount could be utilised to pay the investors, far beyond the promised 60%, the same source revealed.
Ceylinco Shriram was the first, and one among the few companies, to present a practical and realistic repayment plan that addressed the concerns of investors. A pertinent fact is that the Directors of Ceylinco Shriram were committed to seeing every investor settled; understanding their plight, which many felt was reflected in the repayment plan presented. Sources point out that the repayment plan is on track and that Ceylinco Shriram is confident of delivering on the promise made to investors that 60% of the money invested would be settled.
Ceylinco Shriram continued to pay all investors their dues until December 2008, when the company had to face a situation beyond its control, and succumbed to the domino effect of the collapse of Golden Key and other Ceylinco Group companies. Even after the crisis, the company continually strove to maintain a productive dialogue with investors, and seriously considered their views in preparing the repayment plan.
