LOLC rejects allegations over People’s Bank loan facility, warns of legal action
LOLC Holdings PLC has strongly rejected allegations circulating on social media concerning a banking facility involving People’s Bank, describing the claims as misleading and factually inaccurate.
In a clarification submitted to the Colombo Stock Exchange (CSE) on Oct. 14, LOLC said the local-currency borrowing was fully secured against a US dollar deposit maintained with People’s Bank itself.
The company stressed that People’s Bank holds the full collateral supporting the facility, rejecting suggestions that the bank was exposed to unsecured lending or that public deposits were at risk.
LOLC explained that, as part of its global treasury operations, its group companies maintain US dollar deposits with international and local banks, including People’s Bank.
These deposits are used as security to obtain local-currency funding without converting the underlying dollar assets into Sri Lankan rupees.
The company said such arrangements are conventional treasury and foreign-exchange risk management practices adopted by multinational businesses operating across different countries.
LOLC, which operates in 27 countries, also dismissed claims suggesting that the deposit was located overseas or that People’s Bank would have difficulty recovering the funds.
It further rejected allegations that the transaction involved questionable banking practices, foreign-exchange speculation or improper use of public funds.
Meanwhile, LOLC warned that it was bringing publications containing materially misleading information to the attention of relevant regulatory and other authorities.
The company said it reserved the right to pursue legal action against individuals and organizations responsible for originating, publishing or knowingly republishing false or misleading information, where applicable legal requirements are met.
LOLC reiterated its commitment to transparent and responsible operations, stating that it would take necessary steps to protect the interests of the group and its stakeholders. (Newswire)
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