Thursday, July 16, 2009
Dr.Lalith Kotalawela Ms. Padma Nandanikumar remanded
Ceylinco Group Chairman Dr.Jivaka Lalith Bhupendra Kothalawala (mostly known as Lalith Kothalawala) and Ms. Padma Nandanikumar – another director of Golden Key Credit Card Co; Ltd have been remanded till 11th March 2009 by Mt.Lavinia District Court judge Harsha Sethunghe today over the alleged fraud at Golden Key Credit Card Company.
It is also reported that Mt.Lavinia DC judge issued a warrant on Ms. Sicille Priya Carmini Kothalawala (wife of Dr.Lalith Kothalawala) who is currently away from the island to arrest her on her arrival at the Air Port.
Furthermore, a 10 days ultimatum was given to settle nearly Rs. 26 billion worth of GKC deposits to its deposit holders.
On 6th January 2009, Khavan Perera, Sarada Sumanasekara & Manoj Jayalath were remanded by the Mt.Lavinia DC judge over this fraud and Nallan Thuwan was remanded on 17th January 2009. Again on 13th February 2009, two other GKC Directors Niranjan Fernando and Suramya Karunaratne also were remanded by the DC judge.
Courts Suspends Lalith Kothalawala's Passport
Courts Suspends Lalith Kothalawala's Passport
12 Key managers of troubled "Golden Key", ordered to be appeared in courts……….
1st January 2009
Chandana S. Jayakody - Sinhalaya News Agency, Colombo, Sri Lanka
Mount Lavinia Chief Magistrate Harsha Sethunga has issued notices prohibiting Mr. & Mrs.Lalith Kothalawala leaving the country.
The 12 people ordered to be appeared in courts on 12th January includes Kavan Perera, the Deputy Chairman of Golden Key Credit Card Company and its' Financial Director.
This order has been issued considering a report submitted by the Criminal Investigation Department (CID).
Rising from rubble
Rising from rubble
ImageRising from the rubble of Ceylinco House one of Colombo's oldest landmarks destroyed by the January 1996 LTTE bomb, is the Rs. 1.2 billion Ceylinco Seylan tower, which opened last week. October 29 also happened to be Ceylinco Group Chairman Deshamanya Lalith KothalawalaLalith Kotelawala's 60th birthday. The double winged Ceylinco Seylan tower stands tall in a neighbourhood rising up to the sky next to the Deutsche Bank and facing the Crescat Towers and the Hotel Lanka Oberoi, across the Galle Road. The 17 storey east wing called the Millenium wing will house the entirety of Seylan Bank with two separate sections for corporate and personal banking. The 11 storey west wing will house apartment building and offices. The entrance to the building greets you with a choice of construction finishes from wood panelling to marble floors, to granite and ceramic Inside, technology rules with two huge video walls, touch system computer access to account information and automatic checking facility etc.
Seylan Bank Problem in Sri Lanka
Sri Lanka Seylan Bank brought under Bank of Ceylon; new board to be appointed: Central Bank Lalith Kothalawala
Tags: Markets, Sri Lanka, Banks, US Economy, Tech & Biz, seylan_bank_problem, bank_of_ceylon_and_seylan, lalith_kothalawala
Tags: Markets, Sri Lanka, Banks, US Economy, Tech & Biz, seylan_bank_problem, bank_of_ceylon_and_seylan, lalith_kothalawala
Deshamanya Lalith Kotelawala : A crook or…?
THERE ARE PEOPLE HERE WHO WOULD LIKE TO SEE the man dead,” were the angry words of a group of depositors, standing, sweating in the relentless heat outside the Mount Lavinia Magistrate’s court on the 13th of February.
“We invested our money… our savings because we trusted him, his name, it was like a personal guarantee. Now the money is gone and we have nothing and that man is responsible.”
That man – Deshamanya Lalith Kotelawala, one of the most established and successful businessmen in the country, now has his name spat out with the vitriol and hate usually reserved for exceptionally unpopular politicians.
Both Lalith Kotelawala and his wife Lady, Doctor Sicille Kotelawala, projected themselves as great philanthropists. Both were regularly on television distributing this and that to all and sundry. Newspapers carried costly full page four colour advertisements of the two. What was not known then is that all that money was not theirs. For close to a decade financial specialists have been predicting that the Ceylinco group was a house of cards waiting to collapse. Employing over 20,000 people the group has over 400 companies. But a vast majority of then were running at loses. However they were kept afloat by diverting money from the few companies that were profitable. The fact that Ceylinco group consisted of the country’s largest insurance company at one end and a hair saloon and short-eat shops at the other end made it a nightmare for management.
The bubble burst early this year with the stunning news that the Golden Key Credit card company was bankrupt with a staggering fraud of 26 billion rupees.
Since November, those who deposited money at the Golden Key credit card company have not been receiving interest payments and since early December, depositors have been unable to withdraw the money they invested with the company.
“We gave them our money and now it’s gone, they’ve taken it. This is a crime.”
And it is being treated as such.
The fact that Mr. Kotelawala was not himself on Golden Key’s board of directors and as such was not aware of developments within the company has been used extensively in his defence by lawyers speaking on his behalf
The fact that Mr. Kotelawala was not himself on Golden Key’s board of directors and as such was not aware of developments within the company has been used extensively in his defence by lawyers speaking on his behalf
In December last year, the Criminal Investigations Department (CID) launched an investigation into the collapse of Golden Key, and the company’s CEO Khavan Perera was taken in to remand custody as are a number of other leading members of the Ceylinco group, including Golden Key Finance Director Saradha Sumanasekera and Chaminda Jayalath of Ceylinco Insurance.
However, having been released by the Mount Lavinia Magistrate’s court on the payment of 25 million rupees bail, the Executive Director of Ceylinco Consolidated remained a free man- until the 26th of February.
His wife, as Deputy Chairperson of Ceylinco Consolidated, is arguably equally culpable in this white collar crime. A warrant for her arrest too was issued. But not only does she walk free but was allowed to leave the country despite the magnitude of the alleged crime.
Ignorance is bliss?
From the moment the scandal broke out – Lalith Kotelawala has pleaded both his innocence and ignorance.
Taking out large newspaper advertisements in December (at company expense of course), he insisted that depositors at Golden Key had been the victims of a credit card scam masterminded by Khavan Perera and others within the Golden Key group. He implied that he himself had been duped by the unscrupulous actions of the management. “During the last three days, group chairpersons and I realised that The Golden Key Credit Card Company has been involved in a major Credit Card scam,” ran the text of an advertisement he placed in December.
In fact Kotelawala claimed that he did not even know that the company was taking deposits from the public.
The argument is that while Mr. Kotelawala was Chairman of Ceylinco Consolidated, Golden Key, as a subsidiary, functioned independently within that group- despite his position as Chairman of the Ceylinco Group, Mr. Kotelawala was not directly involved in the management of Golden Key and therefore cannot be held responsible for the criminal actions of that company’s board of directors.
The fact that Mr. Kotelawala was not himself on Golden Key’s board of directors and as such was not aware of developments within the company has been used extensively in his defence by lawyers speaking on his behalf.
However the investigation launched by the CID into the scandal casts severe doubt on Mr. Kotelawala’s pleas of ignorance.
It was discovered that the Golden Key company has not produced a set of properly audited accounts for three years and that the company had not held a board meeting for four years.
“As CEO of the Ceylinco Group, it is impossible for Mr. Kotelawala to have been unaware of a lack of board meetings and accounts within a major subsidiary,” claimed Anura Meddegoda, Partner at Varners Lanka Law Office which is representing the interests of a group of Golden Key depositors. “ If you see how other companies within the Ceylinco Group are run – his input is vital, Lalith Kotelawala was the founder and owner of Golden Key and his attempts to plead ignorance are simply not credible.”
Given the extent of the fraud it is clear that it took place systematically and that money has been misappropriated and mis-invested for years. Inherent weaknesses in Golden Key’s business model and structure appear to have been responsible for the Group’s ultimate failure. It is alleged that the company was functioning effectively as a pyramid scheme using money invested by new depositors to pay off the interest owed to existing investors.
The mere fact that the company was paying extremely high interest rates- up to 28 per cent , should have got the alarm bells ringing loudly. If you pay 28 percent on investment one has to re-invest it in a business that would pay at least four to five percent more. There is no legitimate business in this would that pays you that kind of returns.
As the founder of the company, the argument that Kotelawala only became aware of these practices in December seems somewhat tenuous if not laughable.
Even if he was genuinely ignorant of the fraud within Golden Key, to allow one of your subsidiaries to systematically squander 26 billion rupees seems an act of gross even criminal negligence. As the CEO of the group and effectively the owner of the company – responsibility for Golden Key’s failure must lie with Mr. Kotelawala.
Too big to fail?
Ultimately of course, what cannot be overlooked is the fact that Mr. Kotelawala is a wealthy and powerful man and it’s not often that such men are arrested and remanded like common criminals. Therefore he remained a free man for much longer period that the others. One of the tricks was to claim that he was trying to find the money to pay the depositors. The Attorney General’s department seems to have fallen for that on the premise that justice would be served better by finding a way to pay back the depositors than merely locking Kothalawala in remand prison. But at the end of the day even the AGs’ department appeared to have come to the conclusion that he was stringing them along and was not doing much to sell his assets and settle the depositors.
After all, he hoodwinked over seven thousand people. Hoodwinking the AGs’ department at least for a while could not have been that difficult.
Representing the Attorney General’s department, Deputy Solicitor General Sarath Jayamanne claimed that “though we have certain facts to arrest the Chairman, Golden Key Credit Card Co. Ltd, Dr. Lalith Kotelawala, we need to investigate Golden Key’s money outflow which has been used by the Chairman for personal reasons and many other donation activities.”
While claiming therefore that there were facts pointing to Mr. Kotelawala’s direct involvement and evidence that money from Golden Key had been used by the group CEO for personal reasons, the Attorney General’s department remained hesitant to ask for his arrest.
DSG Jayamanne explained, “if we request the arrest of Mr. Kotelawala now, then the depositors will say that they will not be repaid since the AG has directed the court to arrest him.”
Surely it stands to reason that the trial of a man who has succeeded where several governments have failed – in silencing the media - will struggle to run a natural course if Kotelawala remains free. What is also baffling is why the courts have not issued an arrest warrant for Kotelawala’s wife
Surely it stands to reason that the trial of a man who has succeeded where several governments have failed – in silencing the media - will struggle to run a natural course if Kotelawala remains free. What is also baffling is why the courts have not issued an arrest warrant for Kotelawala’s wife
Mogul?
When he was on bail however, Mr. Kotelawala continued in his arrogant ways. He has moved to silence media coverage of the Golden Key case by threatening journalists with libel and defamation suits. A suit has already been filed on his behalf claiming ten (10) billion rupees as damages from Jithendra Antonio, a journalist, who covered the Golden Key story for the Daily Mirror. A direct suit against a journalist rather than the relevant newspaper is unprecedented and clearly represents a crass attempt to intimidate the media. More importantly Kotelawala has to be delusional to think that his reputation is worth 10 billion rupees after the details that have emerged in court.
DSG Jayamanne himself noted that the media normally so vociferous in their condemnation of those accused of corruption have, given the enormity of this case, remained singularly silent. “It’s as if he the man is a media mogul,” he said.
Further, there have been allegations that attempts have been made to interfere with the CID investigation into the scandal.
Whatever the truth of these allegations, what is clear is that Mr. Kotelawala will make every effort to mitigate the amount of damage to himself and his reputation that accrues from the scandal.
Lawyers acting on his behalf have already filed suits against newspapers and journalists reporting on the Golden Key case – allegedly demanding billions of rupees for damage caused to their client’s reputation.
While suing a journalist for 10 billion rupees might seem an odd decision for a man who styles himself as a philanthropist, a billion rupee defamation suit is a perfectly logical course of action for one of the nation’s most influential businessmen. A man whose reputation alone gave thousands of individuals the confidence to invest billions of rupees. Mr. Kotelawala’s was genuinely a billion rupee reputation and he will use every means at his disposal therefore to prevent it from being shattered utterly by a long jail term.
And that ultimately is perhaps the most compelling reason for the courts to remand him at present; he is too powerful and influential to remain free during the trial.
Surely it stands to reason that the trial of a man who has succeeded where several governments have failed – in silencing the media – will struggle to run a natural course if Kotelawala remains free.
“We invested our money… our savings because we trusted him, his name, it was like a personal guarantee. Now the money is gone and we have nothing and that man is responsible.”
That man – Deshamanya Lalith Kotelawala, one of the most established and successful businessmen in the country, now has his name spat out with the vitriol and hate usually reserved for exceptionally unpopular politicians.
Both Lalith Kotelawala and his wife Lady, Doctor Sicille Kotelawala, projected themselves as great philanthropists. Both were regularly on television distributing this and that to all and sundry. Newspapers carried costly full page four colour advertisements of the two. What was not known then is that all that money was not theirs. For close to a decade financial specialists have been predicting that the Ceylinco group was a house of cards waiting to collapse. Employing over 20,000 people the group has over 400 companies. But a vast majority of then were running at loses. However they were kept afloat by diverting money from the few companies that were profitable. The fact that Ceylinco group consisted of the country’s largest insurance company at one end and a hair saloon and short-eat shops at the other end made it a nightmare for management.
The bubble burst early this year with the stunning news that the Golden Key Credit card company was bankrupt with a staggering fraud of 26 billion rupees.
Since November, those who deposited money at the Golden Key credit card company have not been receiving interest payments and since early December, depositors have been unable to withdraw the money they invested with the company.
“We gave them our money and now it’s gone, they’ve taken it. This is a crime.”
And it is being treated as such.
The fact that Mr. Kotelawala was not himself on Golden Key’s board of directors and as such was not aware of developments within the company has been used extensively in his defence by lawyers speaking on his behalf
The fact that Mr. Kotelawala was not himself on Golden Key’s board of directors and as such was not aware of developments within the company has been used extensively in his defence by lawyers speaking on his behalf
In December last year, the Criminal Investigations Department (CID) launched an investigation into the collapse of Golden Key, and the company’s CEO Khavan Perera was taken in to remand custody as are a number of other leading members of the Ceylinco group, including Golden Key Finance Director Saradha Sumanasekera and Chaminda Jayalath of Ceylinco Insurance.
However, having been released by the Mount Lavinia Magistrate’s court on the payment of 25 million rupees bail, the Executive Director of Ceylinco Consolidated remained a free man- until the 26th of February.
His wife, as Deputy Chairperson of Ceylinco Consolidated, is arguably equally culpable in this white collar crime. A warrant for her arrest too was issued. But not only does she walk free but was allowed to leave the country despite the magnitude of the alleged crime.
Ignorance is bliss?
From the moment the scandal broke out – Lalith Kotelawala has pleaded both his innocence and ignorance.
Taking out large newspaper advertisements in December (at company expense of course), he insisted that depositors at Golden Key had been the victims of a credit card scam masterminded by Khavan Perera and others within the Golden Key group. He implied that he himself had been duped by the unscrupulous actions of the management. “During the last three days, group chairpersons and I realised that The Golden Key Credit Card Company has been involved in a major Credit Card scam,” ran the text of an advertisement he placed in December.
In fact Kotelawala claimed that he did not even know that the company was taking deposits from the public.
The argument is that while Mr. Kotelawala was Chairman of Ceylinco Consolidated, Golden Key, as a subsidiary, functioned independently within that group- despite his position as Chairman of the Ceylinco Group, Mr. Kotelawala was not directly involved in the management of Golden Key and therefore cannot be held responsible for the criminal actions of that company’s board of directors.
The fact that Mr. Kotelawala was not himself on Golden Key’s board of directors and as such was not aware of developments within the company has been used extensively in his defence by lawyers speaking on his behalf.
However the investigation launched by the CID into the scandal casts severe doubt on Mr. Kotelawala’s pleas of ignorance.
It was discovered that the Golden Key company has not produced a set of properly audited accounts for three years and that the company had not held a board meeting for four years.
“As CEO of the Ceylinco Group, it is impossible for Mr. Kotelawala to have been unaware of a lack of board meetings and accounts within a major subsidiary,” claimed Anura Meddegoda, Partner at Varners Lanka Law Office which is representing the interests of a group of Golden Key depositors. “ If you see how other companies within the Ceylinco Group are run – his input is vital, Lalith Kotelawala was the founder and owner of Golden Key and his attempts to plead ignorance are simply not credible.”
Given the extent of the fraud it is clear that it took place systematically and that money has been misappropriated and mis-invested for years. Inherent weaknesses in Golden Key’s business model and structure appear to have been responsible for the Group’s ultimate failure. It is alleged that the company was functioning effectively as a pyramid scheme using money invested by new depositors to pay off the interest owed to existing investors.
The mere fact that the company was paying extremely high interest rates- up to 28 per cent , should have got the alarm bells ringing loudly. If you pay 28 percent on investment one has to re-invest it in a business that would pay at least four to five percent more. There is no legitimate business in this would that pays you that kind of returns.
As the founder of the company, the argument that Kotelawala only became aware of these practices in December seems somewhat tenuous if not laughable.
Even if he was genuinely ignorant of the fraud within Golden Key, to allow one of your subsidiaries to systematically squander 26 billion rupees seems an act of gross even criminal negligence. As the CEO of the group and effectively the owner of the company – responsibility for Golden Key’s failure must lie with Mr. Kotelawala.
Too big to fail?
Ultimately of course, what cannot be overlooked is the fact that Mr. Kotelawala is a wealthy and powerful man and it’s not often that such men are arrested and remanded like common criminals. Therefore he remained a free man for much longer period that the others. One of the tricks was to claim that he was trying to find the money to pay the depositors. The Attorney General’s department seems to have fallen for that on the premise that justice would be served better by finding a way to pay back the depositors than merely locking Kothalawala in remand prison. But at the end of the day even the AGs’ department appeared to have come to the conclusion that he was stringing them along and was not doing much to sell his assets and settle the depositors.
After all, he hoodwinked over seven thousand people. Hoodwinking the AGs’ department at least for a while could not have been that difficult.
Representing the Attorney General’s department, Deputy Solicitor General Sarath Jayamanne claimed that “though we have certain facts to arrest the Chairman, Golden Key Credit Card Co. Ltd, Dr. Lalith Kotelawala, we need to investigate Golden Key’s money outflow which has been used by the Chairman for personal reasons and many other donation activities.”
While claiming therefore that there were facts pointing to Mr. Kotelawala’s direct involvement and evidence that money from Golden Key had been used by the group CEO for personal reasons, the Attorney General’s department remained hesitant to ask for his arrest.
DSG Jayamanne explained, “if we request the arrest of Mr. Kotelawala now, then the depositors will say that they will not be repaid since the AG has directed the court to arrest him.”
Surely it stands to reason that the trial of a man who has succeeded where several governments have failed – in silencing the media - will struggle to run a natural course if Kotelawala remains free. What is also baffling is why the courts have not issued an arrest warrant for Kotelawala’s wife
Surely it stands to reason that the trial of a man who has succeeded where several governments have failed – in silencing the media - will struggle to run a natural course if Kotelawala remains free. What is also baffling is why the courts have not issued an arrest warrant for Kotelawala’s wife
Mogul?
When he was on bail however, Mr. Kotelawala continued in his arrogant ways. He has moved to silence media coverage of the Golden Key case by threatening journalists with libel and defamation suits. A suit has already been filed on his behalf claiming ten (10) billion rupees as damages from Jithendra Antonio, a journalist, who covered the Golden Key story for the Daily Mirror. A direct suit against a journalist rather than the relevant newspaper is unprecedented and clearly represents a crass attempt to intimidate the media. More importantly Kotelawala has to be delusional to think that his reputation is worth 10 billion rupees after the details that have emerged in court.
DSG Jayamanne himself noted that the media normally so vociferous in their condemnation of those accused of corruption have, given the enormity of this case, remained singularly silent. “It’s as if he the man is a media mogul,” he said.
Further, there have been allegations that attempts have been made to interfere with the CID investigation into the scandal.
Whatever the truth of these allegations, what is clear is that Mr. Kotelawala will make every effort to mitigate the amount of damage to himself and his reputation that accrues from the scandal.
Lawyers acting on his behalf have already filed suits against newspapers and journalists reporting on the Golden Key case – allegedly demanding billions of rupees for damage caused to their client’s reputation.
While suing a journalist for 10 billion rupees might seem an odd decision for a man who styles himself as a philanthropist, a billion rupee defamation suit is a perfectly logical course of action for one of the nation’s most influential businessmen. A man whose reputation alone gave thousands of individuals the confidence to invest billions of rupees. Mr. Kotelawala’s was genuinely a billion rupee reputation and he will use every means at his disposal therefore to prevent it from being shattered utterly by a long jail term.
And that ultimately is perhaps the most compelling reason for the courts to remand him at present; he is too powerful and influential to remain free during the trial.
Surely it stands to reason that the trial of a man who has succeeded where several governments have failed – in silencing the media – will struggle to run a natural course if Kotelawala remains free.
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