Central Bank decides to liquidate five bankrupt financial companies – Adaderana Biz
The Monetary Board of the Central Bank of Sri Lanka (Monetary Board) established the Advisory Committee for the Recovery of Failed Financial Companies (Committee) in October 2021 to review possible recovery options for five (5) financial companies in bankruptcy, namely Central Investments & Finance Ltd., ETI Finance Ltd., TKS Finance Ltd., The Finance Company PLC and The Standard Credit Finance Ltd, whose licenses have been canceled or suspended. The Monetary Council has entrusted the Committee with the responsibility of recommending possible stimulus options or recommending the liquidation of the five aforementioned bankrupt financial companies if such stimulus options do not appear feasible.
The Committee submitted its final report to the Monetary Board on 31.05.2022, after careful consideration of several proposals submitted by different parties for the relaunch of four (4) of the aforementioned companies.
The Monetary Council, after reviewing the committee’s report on the said five bankrupt financial companies, noted that the proposals received for consideration by the said committee were unviable and entailed a number of political and legal implications, which did not seem not feasible. within the existing regulatory framework. Furthermore, given the current economic conditions, said committee does not expect that viable proposals will be received from potential investors. In these circumstances, the only option concerning the five (05) defaulting finance companies would be to continue the liquidation/filing of liquidation procedure. In light of the above, the Committee recommended in its report to disband the Committee. Based on the Committee’s recommendation, the Monetary Board decided to dissolve the Committee.
Consequently, actions will be taken to liquidate the five bankrupt financial companies mentioned above in accordance with the applicable legal provisions.