Necessary regulatory initiatives have been taken by the Central Bank to treat several ailing Non Bank Finance Institutions (NBFI) and infuse new capital, senior Central Bank official revealed.
Relevant CB officials have already conducted several rounds of discussions with board of directors and CEOs of NBFIs and directed them to implant corrective measures promptly; CB Deputy Governor H.A.Karunaratne said.
Measures are being taken to strengthen the financial position of ailing finance companies under a resolution plan to infuse fresh capital preventing these institutions from insolvency, he added.
Plans have been devised to consolidate the NBFIs , he said adding that forming a consortium with liquidity support as solution to resurrect the ailing institutions is also under discussions.
He noted that legal action has already been initiated against the directors of troubled ETI Finance Limited (ETIF) to seize their personal assets and transfer those proceeds to the ETIF.
He pointed out that the hole in ETI’s balance sheet was Rs17.5 billion and the matter is now in hearing of the court he said.
Edirisinghe group of companies transaction had had been concluded excluding certain assets for a total consideration of US $ 70 million, which was received in 4 tranches and assets to the corresponding value were transferred to the buyers.
Since the buyer has failed to remit the remaining US $ 5 million, ETIF has retained its subsidiary Swarnamahal Financial Services PLC (SFSP which was intended to be transferred for the corresponding value
He noted that the monetary Board has issued a Notice of Cancellation of the License issued to the Finance Company (TFC), with effect from 23rd October 2019 to safeguard the interests of the depositors and other creditors.
The revival of TFC entirely depends on the availability of an acceptable investor who is willing to invest in the equity capital of the company; he said adding that they are awaiting the government’s decision on the revival f the company.
Mr .Karunaratne said that depositors can take legal action under the companies act against TFC directors if they are responsible for the down fall of the company.
(LI)