Business Times

Central Bank scrutinizes Harry J’s claims in HNB sale issue

By Duruthu Edirimuni Chandrasekera

The Central Bank (CB) is investigating whether business tycoon Harry Jayawardena still has a stake in CBD Exports, which sold its holdings in HNB recently, after the businessman some years back swore in an affidavit that he had no links to CBD Exports.

The new probe came after Zaki Alif, Chairman CBD Exports (CBD) along with director Raj Obeysekera, wrote to the CB early this month complaining about Mr. Jayawardena’s letters to some institutions alleging that these transactions where CBD sold its 8% in HNB (after the regulator directed them to do so) were illegal, that they be reversed and also claiming to be the chairman of the company.

“The CB is examining these letters, because any complaint that comes to us will be examined,” a highly placed CB source told the Business Times. In their letter to the CB on October 6, the two CBD directors say that Mr. Jayawardena wrote letters to the Colombo Stock Exchange (CSE), the Securities and Exchange Commission (SEC) and HNB. “We, being directors of CBD Exports (Pvt) Ltd wish to draw your kind attention to a series of letters that have been written by D.H.S Jayawardene to several institutions including the CSE, the SEC and HNB Bank purporting to be the Chairman of CBD Exports (Pvt) Limited. As you are aware, you directed HNB Bank to require CBD Exports (Pvt) Limited to divest of its shares in HNB Bank for the reason that the holding resulted in a violation of the provisions of section 46 of the Banking Act,” the letter says.

It further states that the Board of Directors of CBD Exports comprising Zaki Alif, Raj Obeyesekera and Sonia Weinman, acting in terms of the direction, disposed of the holding. The legality of their status as directors is borne out by the Form 20 filed with the Registrar of Companies as of October 6. “However, Mr. Jayawardena’s actions, purporting to act as the Chairman of the company, are a blatant attempt to interfere with the disposal of the shares made by the board in compliance with your order. We also like to point out that Mr. Jayawardena’s actions clearly demonstrate his interest in CBD Exports (Pvt) Limited and that the previous assurances given by him (even by affidavit) to the Central Bank stating that he has no connection with CBD Exports Ltd are blatantly false,” the letter says.

They have requested the CB to consider this matter and take action as such conduct clearly indicates that he is not a fit and proper person to act as a director of any financial institution. Mr Jayawardena, who is a director at HNB, has been having a long-running feud with his business partners at Stassens – Alif and Obeysekera.

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