Rolled Up And Cushioned From Reality: Luxury Lifestyle Of Ceylinco’s Kotelawalas
By Faraz Shauketaly
The luxury lifestyle of the failed promoters of the Golden Key Credit Card Company (GKCCC) – Lalith and Cecille Kotelawala continues unabated and with apparent disregard of the plight of over 9,054 depositors who jointly, severally and individually lost a staggering Rs. 26 Billion when GKCCC ran aground in 2009. In a further attempt to shield the principal behind this scandalous company, a new set of automatic Roller Shutters has been installed at the residence of Lalith Kotelawala in Elibank Road, Colombo 5. Kotelawala has lost out on his position as Honorary Consul General for Singapore after the Singaporean government quietly withdrew the appointment – however he maintains the title of Deshamanya awarded to him by an indulgent United National Party.
A set of automatic roller shutters of the size that has been used at the Elibank Road residence of Lalith Kotelawala would easily set you back in excess of Rs. 300,000. Taken in the context of the whopping Rs. 26 Billion misappropriated by the Kotelawala-led GKCCC Rs. 300,000 is a mere pittance. However for those depositors who have been unable to feed their dependants, unable to buy their medicines, indeed unable to independently fund their cost of living let alone anything else, the cost of the roller shutters is an extravagance that the Kotelawalas should do without. If one suffers from High Blood Pressure this bit of news is bound to create an even higher reading said a depositor who at 81 years old was too ashamed to reveal her name.
An aggrieved depositor, Bryan Nicholas was so incensed after reading that Cecille Kotelawala was a resident of the United Kingdom, that he wrote to Britain’s High Commissioner in Colombo, John Rankin urging the British government to act with haste in revoking the legal status that permits Cecille Kotelawala to remain in the United Kingdom – and outside of Sri Lanka’s law enforcement agencies. Mr. Nicholas tells the High Commissioner that he has “suffered immensely both mentally and financially for the past 4 years.”
Mr. Nicholas also wrote to the International Police agency headquarters in France urging speedy action against Mrs. Kotelawala. His chance of ensuring a speedy return to the country for Mrs. Kotelawala appears remote. Both the Kotelawalas, says an aggrieved depositor from Mount Lavinia, “Are Teflon coated in the sense nothing sticks to them. It is an absolute disgrace that Tricky Lalith still hangs on to his Deshamanya title, which the Presidential Secretariat appears to ignore. There is no gain saying that Kotelawala has remained in Sri Lanka to face the music. Kotelawala would have long taken flight if not for the speedy action of the Police department in Colombo and their intelligence. Unfortunately Tricky Lalith’s wife managed to depart. Otherwise the Kotelawalas would have both been shopping together at Harrods and Waitrose and lunching at Maroush in Marble Arch and perhaps indulging in fine Dining at the Grosvenor Hotel in London.”
Mrs. Kotelawala’s fall from grace has been spectacular. Not long after Lalith and Cecille Kotelawala managed to evade an investigation started by the Central Bank under Sunil Mendis – Cecille Kotelawala was accompanying President Mahinda Rajapaksa to China on an official delegation. Today it is thought highly unlikely that President Rajapaksa would entertain a telephone call – unless it was from her to say exactly when she is settling her former depositors and to reveal exactly what – possibly the most influential fraudsters this country has known – did to the monies they siphoned off.
After Lalith Kotelawala and his fellow directors were arrested and remanded they were subsequently released on bail. The original intention was that with the release of the directors, a sustainable plan could be put into motion in order that depositors would receive a repayment programme that was accelerated.
In spite of Kotelawala and his directors having been released and in spite of a Supreme Court appointed commission led by the former BOI Chairman, Lakshman Watawala, depositors have continued to be frustrated in their attempts to reach an acceptable resolution. Many depositors we spoke to said they had received Rs. 200,000. The second tranche – of Rs. 100,000 – was after Lakshman Watawala’s committee managed to sell shares held by GKCCC in the Ceysands Hotel in Sri Lanka’s south. Sometime thereafter, Mr. Watawala moved away from the initiative.
More recently, the UNP’s Lakshman Kiriella has charged that had the Central Bank’s internal report on the affairs of the GKCC company been made public and acted and enforced upon, as early as in 2006 the level of the financial loss suffered by GKCCC customers would have been far less. Unfortunately for GKCCC depositors the Special unit at the Central Bank was disbanded shortly thereafter.
The Central Bank however has pointed out that a number of advertisements were placed in various media forums, alerting the public to those institutions that were in fact licensed by the Central Bank. It is noted that none of these notifications carried any reference to Golden Key Credit Card Company.
The high interest payments on offer – strictly not a deposit in terms of the various Banking regulations – may well have clouded the better judgement of many: some of the newer ‘deposits’ attracted deposits of between 30 and 32 per cent per annum.
In an unpublished interview with the late Deshamanya H. K. Dharmadasa – popularly known as Nawaloka Mudalali – the iconic businessman and philanthropist explained quite how he came to investing such a large amount of money with Lalith Kotelawala. “How could I refuse to support him? He called me personally and asked me to support the company saying that it was a sound investment. Our companies grew in tandem and he was a well respected man, part and parcel of the so-called respectable society and doing a lot of charitable work.”
Iconic figures, politicians, clergy from across the spectrum, Muslim businessmen who ought not to have gone for interest bearing accounts and thousands of quite ordinary investors were taken in by the guile and the apparent respectability of Lalith Kotelawala – even a well known tea exporter who told us that he would never invest in any Kotelawala company because Ceylinco was a mere ‘house of cards’ that would collapse if something happened to Lalith. His name appears in the Ceylinco List that was published by The Sunday Leader – he lost over Rs. 10 Million.
The Grey Area That Golden Key Traded In And Exploited
A depositor with Golden Key Credit Card Company explained how he came to lose out on a little over Rs. 3 Million. The depositor who declined to be named perhaps because he is well regarded as knowledgeable on most matters being a maritime professional and made the error of mistakenly marking up Kotelawala as a businessman of repute, explained that GKCCC never advertised publicly. Their modus operandi was the best form of advertising and they exploited that to the hilt: word of mouth. This he explained, made it even more difficult to monitor for the authorities. GKCCC essentially exploited a loophole in the regulatory system.
GKCCC was not licensed by the Central Bank as there was no need: they were not a deposit taking institution. The money that everyone says was interest was actually called a rebate! At times this rebate amounted to over 30% per annum. Singularly astounding figures which if it had been advertised openly would naturally have caught the eyes of any Consumer Affairs Authority.
As the published letter shows, the amount of money accepted by GKCCC was used as a deposit against a credit card and the charges one would incur when using the card. The rebate – in this instance Rs. 41,250 per month – would be credited to the credit card account each month. If the deposit was withdrawn a notice period of 30-60 days was required. In most respects GKCCC passed off its operation as though it were a legitimate deposit taking institution.
No Extradition Request – British High Commission
We contacted the British High Commission in Colombo for their comment and received the following statement:
“We are aware of the distress caused by the collapse of the Golden Key Credit Card Company and of the depositors’ continued fight for justice.
We are not at liberty to discuss individual immigration cases and are unaware of the origin of reports that Mrs. Kotelawala has been granted UK citizenship.
There are strict requirements governing who is eligible for British citizenship which can be found on the UK Home Office website www.homeoffice.gov.uk
While we are aware of the allegations against Mrs. Kotelawala the United Kingdom has to date not received an extradition request from the Sri Lankan government in relation to this case.”