Depositors taken for a ride again? Alleged contempt of Court as F&G funds misused

OVER 14 years after the collapse of the Finance & Guarantee (F&G) group, thousands of depositors say they are once again being failed — this time by those entrusted with reviving the defunct companies under the direct supervision of Sri Lanka's Supreme Court.

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The F&G group, once part of the wider Ceylinco conglomerate, collapsed in 2009, leaving an estimated 7,000 depositors unable to recover more than Rs. 6 billion in savings. Although Court proceedings later acknowledged that the group’s assets exceeded its liabilities, liquidation and recovery efforts have dragged on for over a decade.

During this prolonged process, many depositors have died without seeing justice or restitution.

In recent years, depositors were offered renewed hope when new management was appointed under Court oversight to revive Finance & Guarantee Property Developers (F&G PDL) and its related entities. Acting on representations made to the Court, the Supreme Court approved a structured repayment plan and ordered partial repayments amounting to 51% of deposits, without interest, on the explicit understanding that depositor funds-including proceeds from asset disposals - would be safeguarded and applied strictly in accordance with the Courtapproved settlement framework.

Depositors now allege that these assurances have been breached.

According to information shared with depositor associations, assets belonging to F&G have been disposed of in recent months, generating liquidity that depositors say should have been channelled towards scheduled repayments. Instead, depositors allege that portions of these funds were diverted away from the Court-approved repayment plan and utilised for purposes unrelated to depositor settlement.