By: Staff Writer
Colombo (LNW): ZRA Company Ltd., a privately owned firm has taken over two collapsed companies belonging to the defunct conglomerate Ceylinco Group, Finance & Guarantee Real Estate Company Ltd., and Finance & Guarantee Property Developers (PDL), under the directives of the Supreme Court.
Being one of the three bidders ZRA Holdings succeeded in clinching the deal under the supervision of the Central Bank and filtration by KPMG Public Accountants & Management Consultants.
Both Companies collapsed in 2008 when there was a run on the deposits held by them as well as a run on deposits held by other subsidiaries and related companies in the Ceylinco Group.
After a lapse of nearly 15 years the nearly 4000 depositors with deposits amounting to around Rs. 4,200 Million will be able to get a part of their life long savings from the two Companies.
The Settlement Plan prepared by the Central Bank in 2017 and submitted to the Supreme Court based on the value of Company assets at the time specified that the depositors in RECL be paid 61% on the deposits without any interest thereon and depositors in PDL be paid 51% of the deposits without interest thereon.
The unsecured creditors were allowed payment at 70% of the value of amounts due to them. The secured creditors are not mentioned in the Plan thus prima facie allowing 100% settlement to them.
Records in both Companies together reflect nearly 4000 depositors – some dead, some gone abroad, some broken down in health and some made paupers in the long drawn struggle to claim their life long savings.
ZRA Holdings also secured the Fingara International Cricket Academy and the Fingara Town & Country Club which are wholly owned subsidiaries of The F&G Real Estate Company.
The entire package of company assets now amounts to nearly Rs. 8,500 Mn and liabilities of Rs 4,200 Mn were given to ZRA Holdings for a paltry sum of Rs 500 Mn investment in the Companies.
A smart move by ZRA which went unnoticed by the authorities is that ZRA secured shares in the Company at a price of 10 cents per share thus getting 2,500 million shares for a price of Rs 250 Mn in each of the two Companies while agreeing to issue shares to the Depositors at Rs. 10 per share.
Steps are being hurriedly taken to issue the non-voting shares which will be about 2 million shares in each company making it a negligible minority shareholding. The once vociferous and active Depositor Associations have gone silent on this issue.
The instalment payments of the 51% and 61% of deposits will be paid in 4 instalments every 6 months commencing from 11th March 2024 and ending in 11th September 2025.
The New Board of Directors in F&G RECL and F&G PDL and the Cricket Academy and the Town & Country Club Include P.S Subasinghe, M. Edirimanne, L. J. Isaac, Dixon Nilaweera and Ranjan Silva.
