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COPE reveals 10 firms behind People’s Bank losses

27 May 2022

  • Yashoda Group, Daya Apparel among defaulters on state bank’s loans
  • Rasamanickam releases names and figures to public
  • Alleges increased NPL ratio resulted in bank making losses
  • Slams bank for not taking swift actions against enterprises 
    By Imsha Iqbal  The Committee on Public Enterprises (COPE) recently revealed that the Non-Performing Loans (NPLs) of state-owned People’s Bank increased to 45.94% in 2020 compared to 2017, driven mainly by around 10 enterprises who had defaulted on loans borrowed from said bank during the period 2017-2021.  According to the information issued by the Committee, Yashoda Group was among the top borrowers who had defaulted on their loans.  Apart from Yashoda Group, CML MTD Group, Mihin Lanka (Pvt.) Ltd., W.M. Mendis and Company Ltd., Huravee International (Pvt.) Ltd., Daya Apparel Group, Nawaloka Group, Good Fellows (Pvt.) Ltd., Rican Lanka (Pvt.) Ltd., and Graline Express (Pvt.) Ltd. are the nine other enterprises that borrowed loans that later became NPLs due to non-repayment.  According to the report, by 2020, in comparison to 2017, NPLs had increased 45.94%, which accounts for a sum of Rs. 14, 910.66 million.  Illankai Tamil Arasu Kachchi (ITAK) MP Shanakiyan Rasamanickam slammed state-owned People’s Bank for not acting swiftly upon the NPLs, which includes a defaulted loan owed by United National Party (UNP) Member and former Minister Daya Gamage, which had reportedly resulted in the bank incurring losses.  Citing the COPE report, Rasamanickam stated that during the last five years, People’s Bank’s NPLs had amounted to Rs. 54 billion. Among the 10 listed enterprises, Daya Apparel Group owed the sixth-highest amount to People’s Bank. W.A. Mendis and Company Ltd. had accrued the fourth-highest amount, of Rs. 3.242 billion, in non-performing loans, while Grand Mountain Hotel (Pvt.) Ltd. owes Rs. 3.685 billion to People’s Bank.  MP Rasamanickam released the COPE report to the media, saying that he was willing to face any consequences in case COPE chose to take disciplinary actions against him with regard to this release of the document, adding that he believes that the general public needs to be aware of these matters.  He stated that People’s Bank Chairperson Sujeewa Rajapakse had written to him, stating that the loan amounting to Rs. 3 billion granted to Daya Gamage had not been written off as bad debt. However, the letter further read that the bank aims to legitimately collect the owed amount from Gamage.  Rasamanickam also charged that Premier Ranil Wickremasinghe might have advised the bank to issue the said letter, as the Premier and Gamage are closely affiliated, pointing out that Daya Gamage was once a Cabinet Minister, while his wife is a former Deputy Minister.  Noting that People’s Bank is a state bank, established for the people, he questioned why the management of People’s Bank had taken five years to take legal action against the enterprises that had caused such high NPLs. “The Prime Minister says that the people in Sri Lanka are struggling due to the low levels of capital in the country, but Daya Apparel Group alone owed Rs. 785 million in 2019. By 2020 that amount grew to Rs. 1.943 billion, and in 2021, the amount owed to People’s Bank was Rs. 2.647 billion. On the other hand, Yashoda Group owes the bank an amount of Rs. 24 billion in non-performing loans.” He noted that if an ordinary person had failed to pay just two leasing premiums, the bank would pursue the individual to repossess the sum, either through funds or assets. Thus, he inquired as to what assets were declared by these companies as collateral when the loans were provided, while pointing out that W.M. Mendis and Co. Ltd. is a company affiliated to Arjuna Aloysius, the son-in-law of Arjun Mahendran.  “During the time People’s Bank took to send me a letter regarding this matter, the bank should have sent letters to the companies in debt,” charged Rasamanickam. 


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