The Golden Key Credit Card Company (GKCCC) was a leading Sri Lankan financial institution specializing in credit card services, and a subsidiary of the Ceylinco Consolidated.[2] Founded on June 3, 1977, it was a wholly-owned subsidiary of the Ceylinco Group, an extensive conglomerate with more than 300 subsidiaries. GKCCC played a pioneering role in establishing the credit card industry in Sri Lanka in the early 1980s. Notably, it was responsible for setting up the initial Merchant Network utilized by all credit card companies in the country.[3][4][5]
| Company type | Private |
|---|---|
| Industry | Financial services |
| Founded | June 3, 1977 |
| Defunct | 2008[1] |
| Fate | Dissolved |
| Headquarters | , Sri Lanka |
Key people | Lalith Kotelawala (Group Chairman) |
| Services | Credit cards |
| Parent | Ceylinco Consolidated |
However, in 2008 it was revealed that the Chairman (Lalith Kotelawala[6][7][8] ) and Board of Directors[9] had engaged in a lengthy embezzlement scheme, spanning from 1999 to 2008. The embezzled sum amounted to a staggering Rs. 26.5 billion, approximately US$200 million, from 9,054 depositors. Consequently, these actions led to the indictment of the chairman and Directors on 91 charges, including criminal misappropriation and breach of trust.
This financial scandal had far-reaching consequences, impacting Sri Lanka's financial sector and leading to substantial regulatory reforms and increased scrutiny of the industry as a whole. This led to a severe liquidity crisis in the final weeks of 2008. The GKCCC scandal and its repercussions had a profound impact on Sri Lanka's financial sector, resulting in significant regulatory reforms and heightened industry oversight.[10][11][12][13]
History
editGKCCC was established as a subsidiary of the Ceylinco Group and officially incorporated in June 1977. During the early 1980s, GKCCC led the way in the emergence of the credit card industry in Sri Lanka, contributing significantly to the sector's growth. The company's groundwork included setting up the initial merchant network, which later served as the blueprint for other credit card operators in the country.
GKCCC achieved several milestones in the Sri Lankan credit card industry:[14]
- 1987 - it introduced Sri Lanka's first domestic Gold Card.
- 1991 - the company pioneered interest-free easy payment schemes.
- 1991 - GKCCC introduced the GK Executive Card, an entertainment-focused credit card, and the innovative Showbiz concept in 1991.
- 1997 - it became the first to offer promotions as a value-added service, including holiday weekend packages and foreign tours.
- 2000 - GKCCC launched the GK Privilege Card, a Discount Card.
- 2003 - it unveiled Sri Lanka's first domestic Platinum Card.
The GKCCC Scandal (2008)
editLegal Proceedings and Indictments
editIn 2008, GKCCC faced a major scandal when former Ceylinco Chairman Lalith Kotelawala and several members of the GKCCC Board of Directors were indicted in the Colombo High Court on a total of 91 charges. These charges included allegations of criminal misappropriation and criminal breach of trust. They were framed under the Penal Code and Finance Companies Act for offenses committed between March 1999 and December 2008. The indictment specifically accused GKCCC and its board members of conspiring to misappropriate funds, including deposits totaling Rs. 26 billion that belonged to the company.
Involvement of the Central Bank
editThe Central Bank of Sri Lanka also became entangled in the GKCCC case. In a Supreme Court order dated March 23, 2009, it was revealed that the head of the Special Investigations Unit (S.I.U) of the Central Bank had raised concerns about GKCCC's financial operations.
Impact and Regulatory Reforms
editThe GKCCC scandal sent shockwaves through Sri Lanka's financial sector and prompted substantial regulatory reforms, reflecting the need for increased scrutiny and oversight in the industry.
See also
editReferences
edit- ^ "Golden Key collapse". ft.lk/. Wijaya News. Archived from the original on 2018-09-06. Retrieved July 11, 2011.
- ^ "More FR petitions by Ceylinco Depositors". sundaytimes.lk.
- ^ "Sri Lanka depositors of collapsed Ceylinco F&G asked to return reimbursed properties | Asian Tribune". Archived from the original on 2012-05-31. Retrieved 2011-10-24.
- ^ "Sri Lanka's collapsed Golden Key strikes historic repayment deal | Asian Tribune". Archived from the original on 2012-03-22. Retrieved 2011-10-24.
- ^ "Sri Lanka Ceylinco chief says Golden Key mismanaged, boss resigned - LANKA BUSINESS ONLINE". Archived from the original on 2012-05-06. Retrieved 2011-10-24.
- ^ Swindlers list
- ^ "Dilemma of depositors". sundaytimes.lk.
- ^ "Around The World With 'Ceylinco' Kotelawala". Archived from the original on 2021-06-16. Retrieved 2023-10-23.
- ^ http://www.colombopage.com/archive_22B/Oct08_1665200685CH.php
- ^ Worldfolio, The. "Back from the brink". Theworldfolio. Retrieved 2017-09-09.
- ^ CB bails out Seylan Archived 2013-02-19 at archive.today Daily News, 2008-12-30
- ^ "Golden Key collapse: Lalith K and others finally indicted on 91 charges | Daily FT". www.ft.lk.
- ^ "Sri Lanka Business News | Online edition of Daily News - Lakehouse Newspapers". archives.dailynews.lk.
- ^ "GKCCC: A Pioneer in the Sri Lankan Credit Card Industry", Lanka Business Online, 2017
External links
edit- Sunday Times - "G-Key: Sri Lanka's Second-Largest Financial"
- Sunday Times - "The Golden Key Scam"
- Ada Derana - "Ceylinco group’s Golden Key owners acquitted"
- Colombo Telegraph - "The Failure of the Central Bank, the Golden Key Curse, and the Fall of a Chief Justice"
- Daily Mirror - "G Key: Sri Lanka's Second-Largest Financial"
- Financial Times - "Golden Key Collapse: Lalith K and Others Finally Indicted on 91 Charges"
- Lanka Standard - "The Golden Key Swindle and the Liability of the Central Bank"
- BBC Sinhala - "Sri Lanka's Central Bank revokes Golden Key’s licence"
- Central Bank of Sri Lanka - "Regarding the Golden Key Credit Card Company Ltd." (PDF)