The passing of Lalith Kotelawala

Prominent Sri Lankan business tycoon Lalith Kotelawala passed away at 84 years in a private hospital in Colombo over the weekend. At one point he was one of the most prominent and larger than life business personalities in the country. Kotelawala was the chairman of Ceylinco Group which was into insurance and banking business among others and the founding chairman of Seylan Bank. 

After being considered as one of the outstanding entrepreneurs, Kotelawala fell from grace in 2009 for alleged misappropriation of Rs. 26 billion of depositors’ money in the Golden Key Credit Company. He was later arrested in one of Sri Lanka’s largest financial scandals. In 2022 the Colombo High Court imposed a fine and compensation of Rs. 18 million on Lalith Kotelawala, his wife Sicilia Kotelawala and seven other members of the Board of Directors of Golden Key who pleaded guilty to the charges of accepting people’s money deposits by running an unauthorised financial business contrary to the Finance Act. The Golden Key top staff pleaded guilty to nine charges including accepting public deposits from 1999 to 2008 while running an unauthorised financial institution in violation of the Finance Act.

While not talking ill of the dead is an admirable trait, it also allows those individuals such as Kotelawala to be absolved of the legacy of misery they had created. He is not an individual to be celebrated but a cautionary tale of hubris, corruption and how the politically connected get away with crimes every day in Sri Lanka. Some also viewed Kotelawala too was a victim of politics. 

Investigations revealed that the financial statement and audit report of Golden Key had been changed and adjusted with the consent of the senior management. According to the financial statement 2007 the Golden Key Credit Card Company posted a profit of Rs. 20 million but the actual loss was amounting to Rs. 7 billion. The auditor’s signature had also been forged and the CEO of the company and one of the Vice Chairmen of a Ceylinco group company had allegedly siphoned funds of the company, it was revealed in court. Lalith Kotelawala and the Golden Key Credit Card Company Board of Directors were indicted in the Colombo High Court on charges of criminal misappropriation and criminal breach of trust.

After taking over Ceylinco Consolidated from his father in the 1960s, he expanded the group into new fields including banking, non-banking finance, investment banking, housing and property development, travel and leisure, communication and information technology, education and healthcare. Tens of thousands of depositors had their lives savings destroyed through the Golden Key Ponzi scam. It is clear not only that Kotelawala knew about the fraud, but he lent its legitimacy through his involvement. Even while it was clear the company cannot pay its investors, mostly pensioners investing their life savings for a slightly greater return than the formal banking system, Kotelawala encouraged them to invest even more and enticed others to join the failing pyramid scheme.

Some of those who lost their savings committed suicide. Till his death Kotelawala did not express any regret over the enormous misery he had caused so many individuals. He lived out his life as he was born, in luxury and without accountability as most privileged Sri Lankans do. While his passing is a sad occasion for his family, it must be yet another reminder of the lack of justice for the crimes committed by a certain strata of citizens who are and will always be beyond the reach of the law.