30, Janadhipathi Mawatha, Colombo 01, Sri Lanka.
Tel : 2477424, 2477423, 2477311
Fax: 2346257, 2477739
E-mail: firstname.lastname@example.org, email@example.com
Issued By Department of Supervision of Non-Bank Financial Institutions.
Current Status of The Finance & Guarantee Company Ltd., Finance &
Guarantee Property Developers (Pvt) Ltd. and F&G Real Estate Co. Ltd.
This information is provided by the Central Bank of Sri Lanka in the public interest,
as it has been observed that some members of the General Public are not properly
informed of the current status of the above mentioned companies.
The Finance & Guarantee Company Limited
The Finance & Guarantee Company Limited (TFGL) is a registered finance
company. TFGL suffered liquidity constraints in the wake of the crisis in the Ceylinco
Group. The Central Bank of Sri Lanka appointed Merchant Bank of Sri Lanka PLC
as the Managing Agent of TFGL with effect from 31.03.2009, in order to strengthen
TFGL and restore public confidence in the company.
Consequent to the fundamental rights application bearing SCFR Case No.317/09 filed
by some investors of Finance & Guarantee Property Developers (Pvt) Ltd and F&G
Real Estate Co Ltd, the Supreme Court issued a stay order to TFGL on 01.06.2009.
These developments restrained the day to day business operations of the company.
On 23.10.2009, the Supreme Court lifted the stay order issued on TFGL and
currently, the Managing Agent is taking steps to commence business operations of the
company on an immediate basis. The Central Bank of Sri Lanka has issued necessary
directions to enable the company to strengthen its financial position.
In order to recommence the normal business activities, the company is now
considering to reorganise the company under the new name viz., Island Finance
Finance & Guarantee Property Developers (Pvt) Ltd and F&G Real Estate Co.
Finance & Guarantee Property Developers (Pvt) Ltd. (FGPD) and F&G Real Estate
Co. Ltd. (FRGE) are not companies registered with the Central Bank of Sri Lanka to
carry on finance business.
Some investors of the aforementioned companies filed a fundamental rights
application bearing SCFR Case No.317/09 on the failure of the said companies to
honour their obligations to investors.
When the fundamental rights application was considered in the Supreme Court on
23.10.2009, the Hon. Attorney General informed court that the representatives of the
F&G Depositors' Association, having considered the options available to them to
recover the investments made with the said companies, had agreed to form a trust in
order to protect the assets and secure the interest of the investor-depositors.
The Supreme Court, having considered the representations, granted approval to form
a trust each for FGPD and FGRE.
It was also ordered that the trustees of those trusts should include 3 individuals
among the members of the F&G Depositors' Association and 3 others nominated by
the F&G Depositors' Association, including a lawyer, accountant and a valuer. The
appointment of those trustees to be approved by the Supreme Court.
The Supreme Court further ordered that the functioning of the trusts would be under
the supervision of the Supreme Court.