Golden Key depositors arraigns CB for contempt alleging non-execution of settlement

By S. S. Selvanayagam

The Supreme Court has fixed for hearing on 2 October, the Contempt proceedings against the Central Bank and the then Minister of Finance initiated by aggrieved Golden Key Credit Card depositors for failing to repay deposits above Rs. 10 million as pledged by the Government.  

 The Petitioners initiated contempt proceedings for allegedly failing to pay depositors as undertaken by the Respondents wherein under settlement entered into in Court, the depositors above Rs. 10 million had to be paid within a period of one year from the date of settlement which fell in August 2016.

 The Bench comprised Chief Justice Priyasath Dep and Justice Anil Gooneratne. When the contempt proceedings was called on 14 June, Senior Deputy Solicitor General Viraj Dayaratne informed Court that the payments had not been made according to the undertaking, but the Government would make the payments with Rs. 500 million being released for payments on 14 June 2017.  He also informed Court that another Rs. 3,000 million is to be released for payment before the next budget.

 Petitioners Roshan Harindra Fernando and Ishani Shrimathi Fernando cited the Monetary Board of the Central Bank, then Finance Minister Ravi Karunanayake, Secretary to the Treasury and Finance Ministry Dr. R. H. S. Samarathunge, Central Bank Governor Indrajith Coomaraswamy and members of the Monetary Board as well as the Attorney General as Respondents.  Hejaaz Hisbullah instructed by Lilanthi Kumari appeared for the Petitioners.

 The Petitioners state they were depositors in the GKCCL along with around 9,000 depositors of the said company who had lost their deposit and investment made with the said company.

 They state that the Supreme Court on 23 March 2009 granted leave to proceed with the fundamental rights petition filed by the aggrieved depositors.  The said application was heard before several Benches of the Court during the years 2009 to 2015 and was finally heard before a Divisional Bench.

 They state that on 11 May 2009, the Court appointed a Committee of Accountants/Auditors to formulate and implement a scheme of repayment of depositors based on a declaration of assets of the GKCCL and the Directors of GKCCL.

  Thereafter, the Court made several orders wherein a special purpose vehicle was established; a repayment plan was approved and implemented.

 It was under these circumstances that on 18 May 2015, the Minister of Finance and the Monetary Board of the Central Bank sought the permission of the Court to:

 (1) Appoint an auditor to conduct a financial and legal audit of GKCCL to formulate a repayment plan to repay the depositors and creditors of GKCCL;

 

(2) Submit for approval of the Court a time bound repayment plan to be implemented under the Central Bank of Sri Lanka.

 

When this matter was called before the Court on 25 June 2015, the Court was informed that (1) the commitment of the Government to make payments to the depositors as indicated to the Court on the last date, namely on 18 June 2015 stands; (2) the then Governor of the Central Bank has written to the Attorney General by letter dated 25 June 2015 that the Central Bank would be advancing funds required for the implementation of the repayment plan as suggested on 18 June 2015.

 

The Petitioners state that they expressed their agreement to the undertaking as set out above and that the 1st Respondent – the Monetary Board of the Central Bank of Sri Lanka will pay 41% of the deposit value of deposits of depositors after deducting payments already made on a time scale where inter alia depositors with a deposit value of above Rs. 10 Million to be paid within a year.

 

On the settlement arrived at, the Court terminated proceedings in the fundamental rights petition.

 

The Petitioners add that the Monetary Board, the Governor of the Central Bank, Minister of Finance and the Secretary to the Treasury undertook to: (1) pay deposit holders with a deposit value of less that Rs. 2 Million – 41% of their deposit value within a month; (2) pay deposit holders with a deposit value of more than Rs. 2 Million and less than Rs. 10 Million – 41% of their deposit value within two months; (3) pay deposit holders with a deposit value of more than Rs. 10 Million – 41% of their deposit value within a year.

 

Approximately within a month and two months of the termination of proceedings depositors with deposits valued respectively less than 2 Million and 10 Million were paid, the Petitioners said, adding that depositors with deposit values of more Rs 10. Million have to not been paid to date.

 

The Petitioners state that the 1st to 3rd Respondent – Respondents and the 5th to 8th Respondents are in contempt of the Supreme Court for willfully and deliberately refusing to honour an undertaking made to Court; and/or for obtaining a termination of proceedings on the basis of the undertakings and by failing to honour the said undertakings have obstructed the course of justice.