A parliamentary subcommittee has revealed that companies connected to former Minister Daya Gamage received approximately Rs. 974 million in loans from the state-run Housing Development Finance Corporation, raising questions about whether public funds intended for ordinary citizens were diverted to politically…
A parliamentary inquiry into the Sri Lanka Housing Development Finance Corporation has uncovered significant lending to companies associated with former Minister Daya Gamage, according to findings presented to a subcommittee of the Committee on Public Enterprises. The total outstanding amount from these loans, including accumulated interest, now stands at approximately Rs. 974 million, substantially exceeding the original loan disbursements.
The investigation identified at least two major borrowers: Bimputh Finance Company, which originally received Rs. 250 million but now has an outstanding debt of Rs. 546 million, and Olympus Construction, which borrowed Rs. 250 million with the debt now standing at Rs. 328 million. HDFC officials acknowledged that a court order has been issued to liquidate Bimputh Finance Company, with a liquidator already appointed. The Daya Group provided corporate guarantees for the loans, and legal proceedings regarding these guarantees are currently underway.
Concerns raised during the parliamentary proceedings centered on whether the institution had strayed from its core mandate. The HDFC was established specifically to provide concessionary housing loans to low and middle-income Sri Lankans seeking home ownership. Officials questioned how an institution designed to serve ordinary citizens had approved large-scale loans to politically exposed persons, many of which remain unpaid. MP Asitha Niroshana, who chaired the subcommittee, noted that multiple financial institutions across Sri Lanka have reportedly suffered significant losses linked to the Daya Group.
Regarding recovery efforts, HDFC officials indicated that discussions are ongoing with the Ministry of Finance concerning potential payments related to the acquisition of Sevanagala Sugar Industries. Any recovery of HDFC's dues from such payments would be subject to court orders, according to statements made during the proceedings.
