The situation is moving from bad to worse for around 145,000 depositors and 400-odd employees of the crippled The Finance Company PLC (TFC) as it is facing a cancellation of its licence by the Central Bank (CB), with the banking regulator coming under heavy criticism and accusations.
At a media conference in Colombo on Wednesday, TFC employees’ union members and a group of depositors accused the CB for its failure to take any fruitful remedial action as the regulator has allowed it to collapse due to poor management and unsuccessful restructuring programmes.
After the financial crisis in 2009, the management of the company was brought under the purview of the CB and the company had been managed by a board of directors appointed by the CB, they said.
They appealed to the President and the Prime Minister to find some redress for disgruntled depositors and employees of TFC as the CB should bear the responsibility for the present situation of the company.
TFC has been incurring losses since 2009 under the CB-appointed board of directors and it its net assets deteriorated to Rs.9.5 billion and total liabilities to Rs.29.3 billion by end-January 2020, TFC employees’ union President Duminda Tillekeratne said.
This has resulted in a financial gap of Rs.19.7 billion in the balance sheet, he said, adding that within 11 years the positive net asset has become Rs 20 billion net liabilities owing to management inefficiencies.
TFC had Rs.36.7 billion total assets and its total liabilities were in the region of Rs35.54 billion in 2009 with positive value of Rs.1427 million, he disclosed.
As the CB confirmed the credibility and stability of the company to the deposit holders, around 75 per cent of the deposit holders have continued to maintain their deposits at the defunct company even after 2009 financial debacle keeping faith on the regulator.
CB imposed regulatory action on 15 -02-2019 against TFC, pushing depositors including 10,000 senior citizens into distress, he added.
(LI)