Observers of share market activity claim that buying behaviour of Ceylinco Insurance shares indicates that Lalith Kotelawala, the troubled tycoon whose name is inextricably linked with the Ceylinco Group, is set for a remarkable come-back.
Speculation regarding a Kotelawala return began when Minister of Finance Ravi Karunanayake at a media conference on May 13 urged Golden Key defrauded depositors to withdraw their case. Karunanayake promised that the Government would take on the responsibility of ensuring that they receive adequate compensation. He emphasized that should they withdraw the case, those with deposits worth Rs 2m or less would be compensated in less than a month, with Rs 2-10m within two months and others paid off within a year.
This promise hinted at a deal brewing between the fallen Kotelawala and the Government since it would be the former who would have to come up with (hidden?) monies.
This view acquired much credence due to the mysterious purchasing of Ceylinco Insurance shares held by the CIESOT Fund. Earlier court ordered that the fund be disposed of and proceeds given to Ceylinco Insurance employees. CEISOT held 22% of the total Ceylinco Insurance shares.
Close to half of these shares were purchased in two strange buys.
It was reported in the Sunday Island last week that Shiram Capital of India had picked up more than half the shares divested by CEISOT (6.3 out of the 11) while Banque Picter & Cie SA picked up 1.5. This report has not been denied nor have the numbers been disputed.
The said article carried an interesting quote by an unnamed source: “It is interesting that Shriram was formerly associated with Ceylinco through Ceylinco-Shriram and had wound up operations after failing to pay its depositors with at least one of its then directors, a trusted aide of the Kotelawelas. currently out on bail if my memory serves me right.”
The Supreme Court has noted that during the period leading up to September 28, 2009 several Ceylinco Group Companies have disposed large quantities of shares of Ceylinco Insurance and that Pictet & Cie had been purchasing directly.”
The Courts further suspected that Pictet was a proxy for the then Chairman of Ceylinco.
The court took cognizance of the fact that Kotelawala has been in control of the Ceylinco Insurance prior to the collapse of Golden Key and that he was also a controlling member of the Board of Trustees of CIESOT. The court determined that it is highly probable that the said shares have been purchased by Pictet & Cie for and on behalf of J. L. B. Kotelawala.
According to informed sources Kotelawala’s wife Cecille is due to return to the island early next month. Mrs Kotelawala was also charged in court and has spend several years out of the country, presumably absconding.
If Kotelawala is to return and head the Ceylinco Group with the controls he possessed previously he would have to be cleared by the courts, legal experts opine. The minister’s guarantees to the aggrieved GK depositors is therefore seen as part of a process to pave the way for the fallen tycoon to rise again.
A spokesperson for Kotelawala as well as a high ranking official of the Ceylinco Group declined to comment on the minister’s ‘offer’ or the immediate plans or involvement of Kotelawala with respect to the Group.