Several Directors serving on Boards of commercial banks, who were to quit in accordance with Central Bank (CB) regulations, were granted interim relief by the Appeal Court this week.
Appeal Court Judge Rohini Marasinghe on Monday (12) issued an interim injunction granting Directors aged over 70 years, and those completing nine years on Boards of commercial banks, to continue in their service, following a petition filed by Commercial Bank shareholder and good governance activist K.C. Vignarajah.
The interim injunction restrains the implementation of the CB regulation, until the dispute is finally decided by the Court. The next hearing is fixed for January 27.
The two specific rules contested were those requiring bank Directors over 70 years of age, and those who have served nine years on a Board, to retire. The Petitioner has cited the CB Monetary Board, CB Governor Nivard Cabraal and Commercial Bank of Ceylon PLC as Respondents.
According to the petition, “Whatever is the nature of a company’s business, in the field of commerce, its shareholders possess an abiding interest as to who should be at the helm of the institution in which they made monetary investments. Removals and appointments of their Directors is a matter that must deeply affect the shareholders and confidence in the company of their choice. If, in the foreseeable future, the shareholders of the banking sector were to remove their shares from several banking corporations, other than those engaged in business ventures concerning banking, that would inflict an incalculable injury, perhaps to both sectors”.
The action by Mr. Vignarajah is intended at preventing Commercial Bank Chairman Mahendra Amarasuriya from retiring on December 31, 2011, in accordance with CB rules. The interim injunction against CB rules will enable Directors of several bank Boards, scheduled to retire in accordance with the two specific rules, to continue on their respective Boards, until the outcome of the case. Some of them are, Commercial Bank Director B.R.L. Fernando, Chairman- Sampath Bank, I.W. Senanayake and HNB Director Harry Jayawardena. |
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