Sri Lanka freezes assets of Entrust Securities shareholders: CB Governor

ECONOMYNEXT – Authorities have frozen assets of shareholders of Entrust Securities, a primary dealer in gilts, that is alleged to have bilked billions of rupees of clients including the Central Bank itself amid a criminal probe, an official said.

Affairs of Entrust Securities are now administered by state-run National Savings Bank.

Central Bank Governor Indrajit Coomaraswamy told reporters in Colombo that there were discussion on bringing another bank to help overlook its operations.

Meanwhile, some assets of shareholders had been frozen, he said. A criminal investigation was also ongoing.

Entrust Securities is alleged to have sold government securities to clients twice and pulled the money out, and borrowed funds at higher rates than underlying securities to pay those who demanded funds back.

Among the top victims is the provident fund of state-run Ceylon Electricity Board (CEB), and the Central Bank’s own pension and rural development department funds.

According to its annual report Rs1.4 billion of rural development funds were found to be "uncollateralised".

The Central Bank worker’s Widows’ and Orphans fund was hit for Rs283 million. Its Gratuity and Medical Benefits scheme was hit by Rs129 million.

The Central Bank has multiple pension and retirement funds for the benefit of workers, family members and retirees, which are mostly protected from inflation the agency itself generates. (Colombo/Aug31/2016)

 

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