With Ceylinco insurance PLC going for a crucial decision this week, to split their insurance business into Life and General and transfer the entirety of their business to two auxiliary companies; the Insurance company, which is quoted on the stock exchange would become a shell and a mere holding company with no access to their original insurance business.

 

Central to this decision by Ceylinco Insurance and the change that may occur in the share value is also the fate of thousands of Golden Key depositors who were victims of the ponzi scheme operated by this finance company.

 

The connection between Ceylinco Insurance and Golden Key is the CISOT fund currently valued at around Rs. 6 billion.  CIESOT (Pvt.) Ltd. of which Lalith Kotelawala was a shareholder as well as former Chairman, holds 22.86 percent equity in Ceylinco Insurance.  Recently, half of the ownership of CIESOT had been deemed the property of Golden Key depositors by a court order for the settlement of their dues.   

 

That being the case, Ceylinco Insurane farming out its insurance business to auxiliary companies has shareholders worried as to whether the dilution of the Company’s mainline business may affect the Insurance Company’s share value.  What is of more concern however, is that this would also vicariously impact CIESOT’s share value, which would then affect the Golden Key victims who are long awaiting settlement.