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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » CIFL down fall (Mismatch) started in 2007

CIFL down fall (Mismatch) started in 2007

+2
lux2014
Shanaka Pathirana
6 posters

Go down  Message [Page 1 of 1]

Shanaka Pathirana


Equity Analytic
Equity Analytic
CIFL on Rs. 600m project
 

by L. S. A. Wedaarachchi - Sunday Observer 2006/10/15




Deepthi Perera, Chairman - CIFL.


Central Investment and Finance Ltd. (CIFL) has commenced a Rs. 600 million BOI Project at Homagama to construct two hundred housing units.

The CIFL plans to have a carefully designed housing village with independent housing units. Explaining the concept behind his project Deepthi Perera chairman CIFL said that the house owners win enjoy a peaceful life in the planned project, then name of the project is "Park Line."

According to the chairman house owners will have a 'park living feeling.' It will be a semi luxury housing project with two storeyed housing units consisting of two bedrooms, living room, kitchen and attached bathrooms. The project mainly aiming at professionals, will provide all the common facilities including a day care centre and a swimming pool.

Established in 1966 CIFL is one of the pioneers in the Finance Industry in Sri Lanka. Founded by the late A. G. Hinniappuhamy, the major shareholder of the company was the Baddawela family. In 2004, Deepthi Perera, heading a Group of Companies in Australia called Aspic Corporation took over the controlling interest of the company. Under the new management the company's business activities have expanded tremendously. The deposit base which stood at Rs. 35.9 million in 2005 increased to Rs. 173 million in 2006.

The lease and hire purchase business has increased while high priority has been given to real estate and property development business.

"Our progress in 2005 has been remarkable and was accomplished in the midst of many challenges including fluctuating interest rates, economic changes, flat and inverted yield curves and changing political, tax and regulatory landscapes Chairman Deepthi Perera said.

CIFL's target is to complete two thousand houses within three years. Three luxury housing projects close to the city have been earmarked for the near future.

"The goal of CIFL is to be the most respected and innovative local financial services company. To achieve this the company has embarked on a multi-year strategy to reinforce our values and take the next step in the evolution of our culture, he said.

As a responsible business organisation, the Chairman believes that they have a strong community involvement.

"We have always believed that helping to improve the quality of life in our communities is essential and that is precisely what we have been doing for more than 15 years as a group. By offering a wide range of savings and lending products, as well as supporting initiatives that have a meaningful positive impact. We provide the foundation for our neighbourhoods to flourish, we are mindful that meeting housing needs is essential to ensure the well-being of our community.

Therefore our community development, lending and housing investment efforts are coordinated with many of the not-for-profit organisations where affordable housing programs reach neighbourhoods throughout the country and especially with our new low cost housing project at Homagama.

We plan to give very special discounts for the elderly and military personnel, the chairman said.


????????????????????????????????????????????????????????????????????????????????????????????????????????????
Where are the houses? Only 70 houses built in this project. Rs. 800Mn being transferred to Aspic Homes (JV company who handled the CIFL housing project). The budgeted cost was 600mn for 200 houses. Where were the regulators????? were they closing there eyes??? Mr.Samantha Perera I hope you can comment on this.

lux2014

lux2014
Manager - Equity Analytics
Manager - Equity Analytics
Don't forget, those houses are "semi luxury houses" with "'park living feeling" !
So, they ARE expensive !

Shanaka Pathirana


Equity Analytic
Equity Analytic
@lux2014 wrote:Don't forget, those houses are "semi luxury houses" with "'park living feeling" !
So, they ARE expensive !


Yeah.... Absolutely.... Very Happy

samanthaperera879


Senior Equity Analytic
Senior Equity Analytic
@Shanaka Pathirana wrote:CIFL on Rs. 600m project
 

by L. S. A. Wedaarachchi - Sunday Observer 2006/10/15




Deepthi Perera, Chairman - CIFL.


Central Investment and Finance Ltd. (CIFL) has commenced a Rs. 600 million BOI Project at Homagama to construct two hundred housing units.

The CIFL plans to have a carefully designed housing village with independent housing units. Explaining the concept behind his project Deepthi Perera chairman CIFL said that the house owners win enjoy a peaceful life in the planned project, then name of the project is "Park Line."

According to the chairman house owners will have a 'park living feeling.' It will be a semi luxury housing project with two storeyed housing units consisting of two bedrooms, living room, kitchen and attached bathrooms. The project mainly aiming at professionals, will provide all the common facilities including a day care centre and a swimming pool.

Established in 1966 CIFL is one of the pioneers in the Finance Industry in Sri Lanka. Founded by the late A. G. Hinniappuhamy, the major shareholder of the company was the Baddawela family. In 2004, Deepthi Perera, heading a Group of Companies in Australia called Aspic Corporation took over the controlling interest of the company. Under the new management the company's business activities have expanded tremendously. The deposit base which stood at Rs. 35.9 million in 2005 increased to Rs. 173 million in 2006.

The lease and hire purchase business has increased while high priority has been given to real estate and property development business.

"Our progress in 2005 has been remarkable and was accomplished in the midst of many challenges including fluctuating interest rates, economic changes, flat and inverted yield curves and changing political, tax and regulatory landscapes Chairman Deepthi Perera said.

CIFL's target is to complete two thousand houses within three years. Three luxury housing projects close to the city have been earmarked for the near future.

"The goal of CIFL is to be the most respected and innovative local financial services company. To achieve this the company has embarked on a multi-year strategy to reinforce our values and take the next step in the evolution of our culture, he said.

As a responsible business organisation, the Chairman believes that they have a strong community involvement.

"We have always believed that helping to improve the quality of life in our communities is essential and that is precisely what we have been doing for more than 15 years as a group. By offering a wide range of savings and lending products, as well as supporting initiatives that have a meaningful positive impact. We provide the foundation for our neighbourhoods to flourish, we are mindful that meeting housing needs is essential to ensure the well-being of our community.

Therefore our community development, lending and housing investment efforts are coordinated with many of the not-for-profit organisations where affordable housing programs reach neighbourhoods throughout the country and especially with our new low cost housing project at Homagama.

We plan to give very special discounts for the elderly and military personnel, the chairman said.


????????????????????????????????????????????????????????????????????????????????????????????????????????????
Where are the houses? Only 70 houses built in this project. Rs. 800Mn being transferred to Aspic Homes (JV company who handled the CIFL housing project). The budgeted cost was 600mn for 200 houses. Where were the regulators????? were they closing there eyes??? Mr.Samantha Perera I hope you can comment on this.

Hello Shanaka,

By the look of it yes the regulators were closing the eyes, In their annual report for 2010 (http://cifl.lk/downloads/applications/An_rp_1.pdf ) their investment for the project is almost 800 Million, But if you closely see their lending portfolio it is only 443 Million. But in their P&L interest Income is 402 Million. How on Earth you can have a 100% interest Income ? So which means they have inflated the Interest Income. And then you can see in BS an Interest receivable of 417 Million, this shows they are accumulating unrealized interest income. Any one can understand they have charged Interest Income to the Joint venture Investments. But regulators have ignored this, and then again in the next few years they have not reduced the interest receivable or provided for it. so by all means they have been manipulating the interest income to reduce the loses in the company and never recovered those interest amounts. And Not only the CBSL, the SEC, rating companies, all of them have seen these accounts prior to grant to IPO approval for them. I wonder why they haven't seen these things. Or they have seen it or simply ignored? or they had any alternate arrangement with the company, all these are questionable...?

sfmpp


Stock Trader
I have been once actively involved in capital markets from Investment banking point of view. Mind you this is my revisit just after 3 years. I remember this company and ASPIC homes was related to the Big Boss and this explains the scenario

Shanaka Pathirana


Equity Analytic
Equity Analytic
@samanthaperera879 wrote:
@Shanaka Pathirana wrote:CIFL on Rs. 600m project
 

by L. S. A. Wedaarachchi - Sunday Observer 2006/10/15




Deepthi Perera, Chairman - CIFL.


Central Investment and Finance Ltd. (CIFL) has commenced a Rs. 600 million BOI Project at Homagama to construct two hundred housing units.

The CIFL plans to have a carefully designed housing village with independent housing units. Explaining the concept behind his project Deepthi Perera chairman CIFL said that the house owners win enjoy a peaceful life in the planned project, then name of the project is "Park Line."

According to the chairman house owners will have a 'park living feeling.' It will be a semi luxury housing project with two storeyed housing units consisting of two bedrooms, living room, kitchen and attached bathrooms. The project mainly aiming at professionals, will provide all the common facilities including a day care centre and a swimming pool.

Established in 1966 CIFL is one of the pioneers in the Finance Industry in Sri Lanka. Founded by the late A. G. Hinniappuhamy, the major shareholder of the company was the Baddawela family. In 2004, Deepthi Perera, heading a Group of Companies in Australia called Aspic Corporation took over the controlling interest of the company. Under the new management the company's business activities have expanded tremendously. The deposit base which stood at Rs. 35.9 million in 2005 increased to Rs. 173 million in 2006.

The lease and hire purchase business has increased while high priority has been given to real estate and property development business.

"Our progress in 2005 has been remarkable and was accomplished in the midst of many challenges including fluctuating interest rates, economic changes, flat and inverted yield curves and changing political, tax and regulatory landscapes Chairman Deepthi Perera said.

CIFL's target is to complete two thousand houses within three years. Three luxury housing projects close to the city have been earmarked for the near future.

"The goal of CIFL is to be the most respected and innovative local financial services company. To achieve this the company has embarked on a multi-year strategy to reinforce our values and take the next step in the evolution of our culture, he said.

As a responsible business organisation, the Chairman believes that they have a strong community involvement.

"We have always believed that helping to improve the quality of life in our communities is essential and that is precisely what we have been doing for more than 15 years as a group. By offering a wide range of savings and lending products, as well as supporting initiatives that have a meaningful positive impact. We provide the foundation for our neighbourhoods to flourish, we are mindful that meeting housing needs is essential to ensure the well-being of our community.

Therefore our community development, lending and housing investment efforts are coordinated with many of the not-for-profit organisations where affordable housing programs reach neighbourhoods throughout the country and especially with our new low cost housing project at Homagama.

We plan to give very special discounts for the elderly and military personnel, the chairman said.


????????????????????????????????????????????????????????????????????????????????????????????????????????????
Where are the houses? Only 70 houses built in this project. Rs. 800Mn being transferred to Aspic Homes (JV company who handled the CIFL housing project). The budgeted cost was 600mn for 200 houses. Where were the regulators????? were they closing there eyes??? Mr.Samantha Perera I hope you can comment on this.

Hello Shanaka,

By the look of it yes the regulators were closing the eyes, In their annual report for 2010 (http://cifl.lk/downloads/applications/An_rp_1.pdf ) their investment for the project is almost 800 Million, But if you closely see their lending portfolio it is only 443 Million. But in their P&L interest Income is 402 Million. How on Earth you can have a 100% interest Income ? So which means they have inflated the Interest Income. And then you can see in BS an Interest receivable of 417 Million, this shows they are accumulating unrealized interest   income. Any one can understand they have charged Interest Income to the Joint venture Investments. But regulators have ignored this, and then again in the next few years they have not reduced the interest receivable or provided for it. so by all means they have been manipulating the interest income to reduce the loses in the company and never recovered those interest amounts. And Not only the CBSL, the SEC, rating companies, all of them have seen these accounts prior to grant to IPO approval for them. I wonder why they haven't seen these things. Or they have seen it or simply ignored? or they had any alternate arrangement with the company, all these are questionable...?


Dear Mr. Samantha,

Yes I agree with u. They have recognized an interest income at a rate of 30% per annum ? Am I correct? Anyway subsequently they have capitalized the Interest receivable and that's why the Project Investment (Investment in Real Estate - Balance sheet line item) has increased in 2010/2011 & 2011/2012. http://www.cifl.lk/downloads/applications/An_rp_1_2012.pdf - Just go to this link and see the Page 60 (10 year Summary).
But my point is how come 800Mn spent on this project? As per the article its a 600Mn project for 200 houses and up to date there are only 70 odd houses, where as at that time FD liability was around 1.7Bn (2008/2009) , where project investment is 47% of the FD Liability. When looking at regulators point of view CIFL has violated the Single borrower limit which is 15% of Core Capital. The core capital was 218Mn (2008/2009) and the project investment is almost 400% of core capital... lol! As per my knowledge the regulator reviews the financials on a daily basis / weekly basis / monthly basis /quarterly basis & annual basis. What was the External Auditors doing ? Have they emphasized this in there audit report ? I don't think so... The opinion was clean and there wasn't a qualification.
Anyway DEEPTHI PERERA is the MAN behind the SCENE who misled every one. Incredible>>> I think he should have used his ability for a good cause, where he would have become like Dammika Perera, Harry Jayawardena etc.... Its GOD's Will, But someday he will understand things he has done and might repent and could change for a good cause.

GOD BLESS Sri Lanka....

samanthaperera879


Senior Equity Analytic
Senior Equity Analytic
@Shanaka Pathirana wrote:
@samanthaperera879 wrote:
@Shanaka Pathirana wrote:CIFL on Rs. 600m project
 

by L. S. A. Wedaarachchi - Sunday Observer 2006/10/15




Deepthi Perera, Chairman - CIFL.


Central Investment and Finance Ltd. (CIFL) has commenced a Rs. 600 million BOI Project at Homagama to construct two hundred housing units.

The CIFL plans to have a carefully designed housing village with independent housing units. Explaining the concept behind his project Deepthi Perera chairman CIFL said that the house owners win enjoy a peaceful life in the planned project, then name of the project is "Park Line."

According to the chairman house owners will have a 'park living feeling.' It will be a semi luxury housing project with two storeyed housing units consisting of two bedrooms, living room, kitchen and attached bathrooms. The project mainly aiming at professionals, will provide all the common facilities including a day care centre and a swimming pool.

Established in 1966 CIFL is one of the pioneers in the Finance Industry in Sri Lanka. Founded by the late A. G. Hinniappuhamy, the major shareholder of the company was the Baddawela family. In 2004, Deepthi Perera, heading a Group of Companies in Australia called Aspic Corporation took over the controlling interest of the company. Under the new management the company's business activities have expanded tremendously. The deposit base which stood at Rs. 35.9 million in 2005 increased to Rs. 173 million in 2006.

The lease and hire purchase business has increased while high priority has been given to real estate and property development business.

"Our progress in 2005 has been remarkable and was accomplished in the midst of many challenges including fluctuating interest rates, economic changes, flat and inverted yield curves and changing political, tax and regulatory landscapes Chairman Deepthi Perera said.

CIFL's target is to complete two thousand houses within three years. Three luxury housing projects close to the city have been earmarked for the near future.

"The goal of CIFL is to be the most respected and innovative local financial services company. To achieve this the company has embarked on a multi-year strategy to reinforce our values and take the next step in the evolution of our culture, he said.

As a responsible business organisation, the Chairman believes that they have a strong community involvement.

"We have always believed that helping to improve the quality of life in our communities is essential and that is precisely what we have been doing for more than 15 years as a group. By offering a wide range of savings and lending products, as well as supporting initiatives that have a meaningful positive impact. We provide the foundation for our neighbourhoods to flourish, we are mindful that meeting housing needs is essential to ensure the well-being of our community.

Therefore our community development, lending and housing investment efforts are coordinated with many of the not-for-profit organisations where affordable housing programs reach neighbourhoods throughout the country and especially with our new low cost housing project at Homagama.

We plan to give very special discounts for the elderly and military personnel, the chairman said.


????????????????????????????????????????????????????????????????????????????????????????????????????????????
Where are the houses? Only 70 houses built in this project. Rs. 800Mn being transferred to Aspic Homes (JV company who handled the CIFL housing project). The budgeted cost was 600mn for 200 houses. Where were the regulators????? were they closing there eyes??? Mr.Samantha Perera I hope you can comment on this.

Hello Shanaka,

By the look of it yes the regulators were closing the eyes, In their annual report for 2010 (http://cifl.lk/downloads/applications/An_rp_1.pdf ) their investment for the project is almost 800 Million, But if you closely see their lending portfolio it is only 443 Million. But in their P&L interest Income is 402 Million. How on Earth you can have a 100% interest Income ? So which means they have inflated the Interest Income. And then you can see in BS an Interest receivable of 417 Million, this shows they are accumulating unrealized interest   income. Any one can understand they have charged Interest Income to the Joint venture Investments. But regulators have ignored this, and then again in the next few years they have not reduced the interest receivable or provided for it. so by all means they have been manipulating the interest income to reduce the loses in the company and never recovered those interest amounts. And Not only the CBSL, the SEC, rating companies, all of them have seen these accounts prior to grant to IPO approval for them. I wonder why they haven't seen these things. Or they have seen it or simply ignored? or they had any alternate arrangement with the company, all these are questionable...?


Dear Mr. Samantha,

Yes I agree with u. They have recognized an interest income at a rate of 30% per annum ? Am I correct? Anyway subsequently they have capitalized the Interest receivable and that's why the Project Investment (Investment in Real Estate - Balance sheet line item) has increased in 2010/2011 & 2011/2012. http://www.cifl.lk/downloads/applications/An_rp_1_2012.pdf - Just go to this link and see the Page 60 (10 year Summary).
But my point is how come 800Mn spent on this project? As per the article its a 600Mn project for 200 houses and up to date there are only 70 odd houses, where as at that time FD liability was around 1.7Bn (2008/2009) , where project investment is 47% of the FD Liability. When looking at regulators point of view CIFL has violated the Single borrower limit which is 15% of Core Capital. The core capital was 218Mn (2008/2009) and the project investment is almost 400% of core capital... lol! As per my knowledge the regulator reviews the financials on a daily basis / weekly basis / monthly basis /quarterly basis & annual basis. What was the External Auditors doing ? Have they emphasized this in there audit report ? I don't think so... The opinion was clean and there wasn't a qualification.
Anyway DEEPTHI PERERA is the MAN behind the SCENE who misled every one. Incredible>>> I think he should have used his ability for a good cause, where he would have become like Dammika Perera, Harry Jayawardena etc....  Its GOD's Will, But someday he will understand things he has done and might repent and could change for a good cause.

GOD BLESS Sri Lanka....

I don't think Deepthi Perera's ability is a good ability, this is pure misleading and cheating. And i dont think he will ever become like Harry or Dammika with this kind of work. How ever how did they capitalize the interest Income? And also as you said this is significant transaction where they need regulators consent, and if they don't agree they will have to object to the project. but we dont see anything in that nature till the collapse of the company.

Shanaka Pathirana


Equity Analytic
Equity Analytic
@samanthaperera879 wrote:
@Shanaka Pathirana wrote:
@samanthaperera879 wrote:
@Shanaka Pathirana wrote:CIFL on Rs. 600m project
 

by L. S. A. Wedaarachchi - Sunday Observer 2006/10/15




Deepthi Perera, Chairman - CIFL.


Central Investment and Finance Ltd. (CIFL) has commenced a Rs. 600 million BOI Project at Homagama to construct two hundred housing units.

The CIFL plans to have a carefully designed housing village with independent housing units. Explaining the concept behind his project Deepthi Perera chairman CIFL said that the house owners win enjoy a peaceful life in the planned project, then name of the project is "Park Line."

According to the chairman house owners will have a 'park living feeling.' It will be a semi luxury housing project with two storeyed housing units consisting of two bedrooms, living room, kitchen and attached bathrooms. The project mainly aiming at professionals, will provide all the common facilities including a day care centre and a swimming pool.

Established in 1966 CIFL is one of the pioneers in the Finance Industry in Sri Lanka. Founded by the late A. G. Hinniappuhamy, the major shareholder of the company was the Baddawela family. In 2004, Deepthi Perera, heading a Group of Companies in Australia called Aspic Corporation took over the controlling interest of the company. Under the new management the company's business activities have expanded tremendously. The deposit base which stood at Rs. 35.9 million in 2005 increased to Rs. 173 million in 2006.

The lease and hire purchase business has increased while high priority has been given to real estate and property development business.

"Our progress in 2005 has been remarkable and was accomplished in the midst of many challenges including fluctuating interest rates, economic changes, flat and inverted yield curves and changing political, tax and regulatory landscapes Chairman Deepthi Perera said.

CIFL's target is to complete two thousand houses within three years. Three luxury housing projects close to the city have been earmarked for the near future.

"The goal of CIFL is to be the most respected and innovative local financial services company. To achieve this the company has embarked on a multi-year strategy to reinforce our values and take the next step in the evolution of our culture, he said.

As a responsible business organisation, the Chairman believes that they have a strong community involvement.

"We have always believed that helping to improve the quality of life in our communities is essential and that is precisely what we have been doing for more than 15 years as a group. By offering a wide range of savings and lending products, as well as supporting initiatives that have a meaningful positive impact. We provide the foundation for our neighbourhoods to flourish, we are mindful that meeting housing needs is essential to ensure the well-being of our community.

Therefore our community development, lending and housing investment efforts are coordinated with many of the not-for-profit organisations where affordable housing programs reach neighbourhoods throughout the country and especially with our new low cost housing project at Homagama.

We plan to give very special discounts for the elderly and military personnel, the chairman said.


????????????????????????????????????????????????????????????????????????????????????????????????????????????
Where are the houses? Only 70 houses built in this project. Rs. 800Mn being transferred to Aspic Homes (JV company who handled the CIFL housing project). The budgeted cost was 600mn for 200 houses. Where were the regulators????? were they closing there eyes??? Mr.Samantha Perera I hope you can comment on this.

Hello Shanaka,

By the look of it yes the regulators were closing the eyes, In their annual report for 2010 (http://cifl.lk/downloads/applications/An_rp_1.pdf ) their investment for the project is almost 800 Million, But if you closely see their lending portfolio it is only 443 Million. But in their P&L interest Income is 402 Million. How on Earth you can have a 100% interest Income ? So which means they have inflated the Interest Income. And then you can see in BS an Interest receivable of 417 Million, this shows they are accumulating unrealized interest   income. Any one can understand they have charged Interest Income to the Joint venture Investments. But regulators have ignored this, and then again in the next few years they have not reduced the interest receivable or provided for it. so by all means they have been manipulating the interest income to reduce the loses in the company and never recovered those interest amounts. And Not only the CBSL, the SEC, rating companies, all of them have seen these accounts prior to grant to IPO approval for them. I wonder why they haven't seen these things. Or they have seen it or simply ignored? or they had any alternate arrangement with the company, all these are questionable...?


Dear Mr. Samantha,

Yes I agree with u. They have recognized an interest income at a rate of 30% per annum ? Am I correct? Anyway subsequently they have capitalized the Interest receivable and that's why the Project Investment (Investment in Real Estate - Balance sheet line item) has increased in 2010/2011 & 2011/2012. http://www.cifl.lk/downloads/applications/An_rp_1_2012.pdf - Just go to this link and see the Page 60 (10 year Summary).
But my point is how come 800Mn spent on this project? As per the article its a 600Mn project for 200 houses and up to date there are only 70 odd houses, where as at that time FD liability was around 1.7Bn (2008/2009) , where project investment is 47% of the FD Liability. When looking at regulators point of view CIFL has violated the Single borrower limit which is 15% of Core Capital. The core capital was 218Mn (2008/2009) and the project investment is almost 400% of core capital... lol! As per my knowledge the regulator reviews the financials on a daily basis / weekly basis / monthly basis /quarterly basis & annual basis. What was the External Auditors doing ? Have they emphasized this in there audit report ? I don't think so... The opinion was clean and there wasn't a qualification.
Anyway DEEPTHI PERERA is the MAN behind the SCENE who misled every one. Incredible>>> I think he should have used his ability for a good cause, where he would have become like Dammika Perera, Harry Jayawardena etc....  Its GOD's Will, But someday he will understand things he has done and might repent and could change for a good cause.

GOD BLESS Sri Lanka....

I don't think Deepthi Perera's ability is a good ability, this is pure misleading and cheating.  And i dont think he will ever become like Harry or Dammika with this kind of work. How ever how did they capitalize the interest Income? And also as you said this is significant transaction where they  need regulators consent, and if they don't agree they will have to object to the project. but we dont see anything in that nature till the collapse of the company.

In 2009 Jan CIFL was a sunken ship. But with the leadership of him, CIFL managed to go through an IPO (which wasn't successful and oversubscribed ) and the company was operating till end of 2012. There should have been some kind of ability to run a finance company with limited resources especially without assets. That's why I have specifically mentioned that his ability should have used for a good cause.

As per my knowledge Interest receivable being capitalized in 2011 (Go through the 10 year summary - You will understand). Anyway CBSL was informed and some over valued Assets being backed by Aspic Homes (with a sales agreement)- Ex - Arugambay. I think you know that, coz u have specifically mentioned those assets in one of your Thread. You specifically mentioned how they over valued the assets to cover up the homagama investment.

That is not the case in 2011 800mn investment is a sunk cost and passing journal entries for the same subsequently would be irrelevant for my argument . My argument is the downfall started from this project, and that is from 2007. As I mentioned earlier 800Mn invested for 70 houses. This is where the superiors started robbing money from CIFL. What happened to CIFL Asset management company (unregistered company)? what happened to that money? The total FD liability being transferred to IFL with the leadership of Deepthi Perera.

Other Info about Deepthi Perera

Deepthi followed Kothalawala, the concept of Kothalawala being followed. Deepthi was an agent of Kothalawala. Deepthi got jailed in 2007 or 2008 because of Kothalawala. Kothalawala wanted to acquire CIFL, but Deepthi refused. Deepthi had told Carvan Perera that he has two passports (when Deepthi and Carvan was flying to Australia) and Carwan has given this Info to Kothalawala. Kothalawala got the revenge due to refusing the offer. What a story... There are more info, will give u subsequently...

So what do u say Mr. Samantha???? You must be thinking how I got to know these stories.... Yes I will Tell you - "News Travel Fast "..... Don't get surprised... This is the bitter truth....

RPPA


Expert
Expert
Yes guys

A bunch of crooks played it out & regulators were silent along the way until inevitable happens.

According to the new regulations the directors are liable from their personal assets as they are clearly negligent. Can't see any action against the so far.

See what Malony has done to Tochwood. He flown out of the country with clean hands. It is eminent that when he is selling on the open market the state of the company.

Shocked Shocked Shocked Shocked Shocked Shocked Shocked Shocked

samanthaperera879


Senior Equity Analytic
Senior Equity Analytic
@Shanaka Pathirana wrote:
@samanthaperera879 wrote:
@Shanaka Pathirana wrote:
@samanthaperera879 wrote:
@Shanaka Pathirana wrote:CIFL on Rs. 600m project
 

by L. S. A. Wedaarachchi - Sunday Observer 2006/10/15




Deepthi Perera, Chairman - CIFL.


Central Investment and Finance Ltd. (CIFL) has commenced a Rs. 600 million BOI Project at Homagama to construct two hundred housing units.

The CIFL plans to have a carefully designed housing village with independent housing units. Explaining the concept behind his project Deepthi Perera chairman CIFL said that the house owners win enjoy a peaceful life in the planned project, then name of the project is "Park Line."

According to the chairman house owners will have a 'park living feeling.' It will be a semi luxury housing project with two storeyed housing units consisting of two bedrooms, living room, kitchen and attached bathrooms. The project mainly aiming at professionals, will provide all the common facilities including a day care centre and a swimming pool.

Established in 1966 CIFL is one of the pioneers in the Finance Industry in Sri Lanka. Founded by the late A. G. Hinniappuhamy, the major shareholder of the company was the Baddawela family. In 2004, Deepthi Perera, heading a Group of Companies in Australia called Aspic Corporation took over the controlling interest of the company. Under the new management the company's business activities have expanded tremendously. The deposit base which stood at Rs. 35.9 million in 2005 increased to Rs. 173 million in 2006.

The lease and hire purchase business has increased while high priority has been given to real estate and property development business.

"Our progress in 2005 has been remarkable and was accomplished in the midst of many challenges including fluctuating interest rates, economic changes, flat and inverted yield curves and changing political, tax and regulatory landscapes Chairman Deepthi Perera said.

CIFL's target is to complete two thousand houses within three years. Three luxury housing projects close to the city have been earmarked for the near future.

"The goal of CIFL is to be the most respected and innovative local financial services company. To achieve this the company has embarked on a multi-year strategy to reinforce our values and take the next step in the evolution of our culture, he said.

As a responsible business organisation, the Chairman believes that they have a strong community involvement.

"We have always believed that helping to improve the quality of life in our communities is essential and that is precisely what we have been doing for more than 15 years as a group. By offering a wide range of savings and lending products, as well as supporting initiatives that have a meaningful positive impact. We provide the foundation for our neighbourhoods to flourish, we are mindful that meeting housing needs is essential to ensure the well-being of our community.

Therefore our community development, lending and housing investment efforts are coordinated with many of the not-for-profit organisations where affordable housing programs reach neighbourhoods throughout the country and especially with our new low cost housing project at Homagama.

We plan to give very special discounts for the elderly and military personnel, the chairman said.


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Where are the houses? Only 70 houses built in this project. Rs. 800Mn being transferred to Aspic Homes (JV company who handled the CIFL housing project). The budgeted cost was 600mn for 200 houses. Where were the regulators????? were they closing there eyes??? Mr.Samantha Perera I hope you can comment on this.

Hello Shanaka,

By the look of it yes the regulators were closing the eyes, In their annual report for 2010 (http://cifl.lk/downloads/applications/An_rp_1.pdf ) their investment for the project is almost 800 Million, But if you closely see their lending portfolio it is only 443 Million. But in their P&L interest Income is 402 Million. How on Earth you can have a 100% interest Income ? So which means they have inflated the Interest Income. And then you can see in BS an Interest receivable of 417 Million, this shows they are accumulating unrealized interest   income. Any one can understand they have charged Interest Income to the Joint venture Investments. But regulators have ignored this, and then again in the next few years they have not reduced the interest receivable or provided for it. so by all means they have been manipulating the interest income to reduce the loses in the company and never recovered those interest amounts. And Not only the CBSL, the SEC, rating companies, all of them have seen these accounts prior to grant to IPO approval for them. I wonder why they haven't seen these things. Or they have seen it or simply ignored? or they had any alternate arrangement with the company, all these are questionable...?


Dear Mr. Samantha,

Yes I agree with u. They have recognized an interest income at a rate of 30% per annum ? Am I correct? Anyway subsequently they have capitalized the Interest receivable and that's why the Project Investment (Investment in Real Estate - Balance sheet line item) has increased in 2010/2011 & 2011/2012. http://www.cifl.lk/downloads/applications/An_rp_1_2012.pdf - Just go to this link and see the Page 60 (10 year Summary).
But my point is how come 800Mn spent on this project? As per the article its a 600Mn project for 200 houses and up to date there are only 70 odd houses, where as at that time FD liability was around 1.7Bn (2008/2009) , where project investment is 47% of the FD Liability. When looking at regulators point of view CIFL has violated the Single borrower limit which is 15% of Core Capital. The core capital was 218Mn (2008/2009) and the project investment is almost 400% of core capital... lol! As per my knowledge the regulator reviews the financials on a daily basis / weekly basis / monthly basis /quarterly basis & annual basis. What was the External Auditors doing ? Have they emphasized this in there audit report ? I don't think so... The opinion was clean and there wasn't a qualification.
Anyway DEEPTHI PERERA is the MAN behind the SCENE who misled every one. Incredible>>> I think he should have used his ability for a good cause, where he would have become like Dammika Perera, Harry Jayawardena etc....  Its GOD's Will, But someday he will understand things he has done and might repent and could change for a good cause.

GOD BLESS Sri Lanka....

I don't think Deepthi Perera's ability is a good ability, this is pure misleading and cheating.  And i dont think he will ever become like Harry or Dammika with this kind of work. How ever how did they capitalize the interest Income? And also as you said this is significant transaction where they  need regulators consent, and if they don't agree they will have to object to the project. but we dont see anything in that nature till the collapse of the company.

In 2009 Jan CIFL was a sunken ship. But with the leadership of him, CIFL managed to go through an IPO (which wasn't successful and oversubscribed ) and the company was operating till end  of 2012. There should have been some kind of ability to run a finance company with limited resources especially without assets. That's why I have specifically mentioned that his ability should have used for a good cause.

As per my knowledge Interest receivable being capitalized in 2011 (Go through the 10 year summary - You will understand). Anyway CBSL was informed and some over valued Assets being backed by Aspic Homes (with a sales agreement)- Ex - Arugambay. I think you know that, coz u have specifically mentioned those assets in one of your Thread. You specifically mentioned how they over valued the assets to cover up the homagama investment.

That is not the case in 2011 800mn investment is a sunk cost and passing journal entries for the same subsequently would be irrelevant  for my argument . My argument is the downfall started from this project, and that is from 2007. As I mentioned earlier 800Mn  invested for 70 houses. This is where the superiors started robbing money from CIFL. What happened to CIFL Asset management company (unregistered company)? what happened to that money? The total FD liability being transferred to IFL with the leadership of Deepthi Perera.

Other Info about Deepthi Perera

Deepthi followed Kothalawala, the concept of Kothalawala being followed. Deepthi was an agent of Kothalawala. Deepthi got jailed in 2007 or 2008 because of Kothalawala. Kothalawala wanted to acquire CIFL, but Deepthi refused. Deepthi had told Carvan Perera that he has two passports (when Deepthi and Carvan was flying to Australia) and Carwan has given this Info to Kothalawala. Kothalawala got the revenge due to refusing the offer. What a story... There are more info, will give u subsequently...

So what do u say Mr. Samantha???? You must be thinking how I got to know these stories.... Yes I will Tell you - "News Travel Fast "..... Don't get surprised... This is the bitter truth....

Yes exactly this is the truth, that's why i told you the intentions and actions are based on Cheating. All this process was witnessed by the CBSL as well, my all time question is why were they silent, finally all who are responsible trying ti get away from it and who suffered is the Depositors, Since you open up the Topic of Asset Management, yes how did they transferred the FD liability to a registered Finance Company, And such large liabilities cannot be transferred with out any consent of the regulators, And even there is a internal Money siphoning or cheating happened there, had every one took part of it? if not why were they silent, i mean the Directors and Senior management of IFL. For me all these are reasonable questions. In my opinion if any person in these companies did not like what was happening it was just one phone call to the CBSL Director. and they would have come and intervene on the matters, or all of these people facilitated Deepthi Perera?
If you closely look the the directors on those two companies they were prominent people, I don't want to mention names since they are still in the finance industry, and they cannot be influenced or forced to do things, and those transactions cannot be done with out board papers, resolutions, and other official documents, so why have they not objected? may be there could me a scenario Deepthi Perera had a Thug gang and they were threatening to these people or he paid all these people, other wise they all are fools, any way you are correct about the scenario. I am not surprised about these information because these are well discussed topics about all of us as employees then.

sach9993


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
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