Sri Lanka President Mahinda Rajapaksa on Oct. 18 reportedly directed authorities to proceed with the transfer of all assets, real estate and properties of the now-defunct Golden Key Credit Card Co. to a new entity called the Golden Key Credit Card Co. Special Purpose Vehicle Pvt. Ltd.
The government created the new, consolidated company to sell the assets of the defunct company and to reimburse the institution’s depositors, according to local media.
Last year, Golden Key became embroiled in a fraud scheme in which the company illegally provided credit cards when its customers deposited with the institution. Golden Key issued the cards to the depositors on the basis of their deposit amounts, which violated the country’s card-issuance regulations.
However, the company went bankrupt soon after, leaving its depositors unable to access their funds.
The Sri Lankan central bank in November asked Golden Key depositors to pay off any outstanding balances they might have on the credit cards Golden Key issued them. According to the Central Bank of Sri Lanka, Golden Key cardholders owed 844 million rupees (US$7.4 million or 5 million euros) in card debt at the time of the company’s bankruptcy.
Many of the depositors were unable to pay back their debts because they lost the deposits they had made with Golden Key, a spokesperson for the Golden Key Depositors Association, formed after the alleged fraud became public, tells PaymentsSource.
However, with the new measure, these cardholders will have possible relief. The central bank is open to settling the card dues within the sale of the defunct company’s assets, an official from the central bank tells PaymentsSource.
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