Written by Staff Writer
12 Feb, 2019 | 11:40 am
COLOMBO (News 1st) – News 1st in an exclusive exposé on a conflict of interest involving Jehan Amaratunga who served as the Director of Peoples Bank and as the Chairman of MTD Walkers PLC has now uncovered yet another irregular business dealing.
The People’s Bank granted MTD Walkers PLC various types of borrowings at times amounting to Rs 10 billion. These borrowings were granted without sufficient and easily realisable assets. Without proper securities in place, the bank will be unable to recover the monies owed to it in the event of default of the loan amd being classified as a non-performing loan.
Whilst there were significant disclosures by News 1st in the past regarding various malpractices involving the state banks and MTD Walkers PLC, the authorities are yet to initiate any legal action. The Colombo Stock Exchange (CSE) has placed MTD Walkers PLC (KAPI.N0000) on a watch list.
The company’s financial records show a staggering Rs 18 billion debt to an array of local banks. Of the Rs 18 billion, Rs 4 billion is owed to state banks on top of other borrowing facilities already granted to MTD Walkers PLC.
The records further disclose that a facility of US$19 million was granted by the Exim Bank of Malaysia. This loan was underwritten by the principal shareholder MTD Berhad, Malaysia. The parent company secured the loan against realisable assets owned by MTD Walkers PLC through various private limited companies. As a form of repayment to MTD Berhad, MTD Walkers transferred the shares of the private limited companies which owned the realisable assets to the parent company. Whilst the transfer is wholly legal, the action will leave local banks exposed as they no longer will be able to recover the monies owed to them through the sale of assets. The net effect of the local banks being unable to recover the debt will be that investors in the CSE will experience losses in the bank’s share value.
Two local private banks have now classified MTD Walkers’ loans as non-performing loans thus triggering their procedure to recover the debt. The state-owned banks are yet to make public if any action has been initiated. In an already uncertain economic outlook the authorities seem uninterested in initiating any action to recover the debt to the state.
16 Feb, 2019 | 11:30 PM
13 Feb, 2019 | 01:36 PM
Are you interested in advertising on our website or video channel
Please contact us at [email protected]