The Interim Order moreover stops the respondents, which include the Board of Directors, ‘from holding and/or proceeding with the Extraordinary General Meeting of the 1st Respondent scheduled for Wednesday, 26th October 2016 or any time thereafter for the purpose of obtaining the approval of shareholders to issue shares to the Asian Development Bank (ADB) by way of a private placement, in consideration of the proposal made by ADB to make an equity investment in the 1st Respondent Bank, in any manner whatsoever.’
In this matter, according to Jayawardena, the Board of Directors were moving to get the shares owned by the Government (28% of the total) sold to the ADB at Rs 220 per share, when the price stands at Rs 230 even at ‘the low’ of Friday’s transactions.
The total value of the loss would therefore be in the region of Rs 1 billion considering the volume. The petition further alleges that the Board of Directors were devaluing the shares and thereby hurting existing share-holders to whom they ought to have offered the first refusal as is standard practice.
The case came up before Mr. Shiran Gunaratne, Commercial High Court Judge, Colombo, with Mr. Nihal Fernando, PC with Ms. Romali Tudawe, Mr. Harshula Seneviratne and Mr. Rajindra Jayasinghe,Attorneys-at-Law instructed by Mr. Upendra Gunasekera, Attorney-at-Law representing the petitioner.