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Thursday Nov 28, 2024
Saturday, 24 March 2018 00:42 - - {{hitsCtrl.values.hits}}
By S. S. Selvanayagam
The fundamental rights petition filed by Perpetual Capital Holdings Ltd. subsidiary W. M. Mendis & Company Ltd., to lift a Central Bank-imposed freeze on their accounts on the grounds that it is impacting their business, has been fixed for 28 March by the Supreme Court.
Distillery company W. M. Mendis & Company - a subsidiary of Perpetual Capital Holdings – has filed a fundamental rights violation petition before the Supreme Court, contesting the restriction on its accounts by the Monetary Board of the Central Bank.
The petition was filed by the company and its Chairman Arjun Joseph Aloysius, citing Central Bank Governor Dr. Indrajit Coomaraswamy, Deputy Governor C. J. P. Siriwardena, Acting Director of the Department of Supervision of Non-Bank Financial Institutions W. Ranaweera, and the Attorney General as Respondents. W. M. Mendis & Company was established in 1947 and is engaged in the business of distilling, manufacturing, bottling, distributing and marketing a variety of spirits, and is a 99%-owned subsidiary of Perpetual Capital Holdings.
Petitioners state that the accounts maintained in licensed banks and CDS accounts maintained in the Colombo Stock Exchange by the individuals and entities related to Perpetual Treasuries Ltd. have been restricted.
The restriction had been imposed on 24 bank accounts of W. M. Mendis & Company.
The company informed the Central Bank Governor by a letter dated 29 January about the restrictions placed on the bank accounts, as they have had a direct and severely detrimental impact on the business of the company, inasmuch as the company was unable to make/meet inter alia: Statutory commitments to the Government of Sri Lanka (Excise and VAT); commitments to banks, State banks, mainly Bank of Ceylon and People’s Bank (loan instalments, interest payments and future facilities from banks); commitments to suppliers and risk from frustrated suppliers; and commitments to employees.
The Petitioners state that it was requested that the said restrictions be removed, particularly considering the magnitude of the impact, resulting in loss of livelihood of the employees of the 1st Petitioner.
The Petitioners lament that the Respondents failed and/or refused to release the requisite funds to keep the company afloat, despite agreeing to do so at the meeting held on 30 January.
They aver that in order to investigate the financial affairs of the 1st Petitioner, there is no need or requirement to freeze or restrict the bank accounts of the 1st Petitioner, and allege thus the decision to freeze the said accounts amounts to a mala fide and corrupt act, designed to cripple the business activities of the company.
Petitioners state W. M. Mendis & Company has staff strength of 323 employees, and that the company is unable to pay their salaries and statutory payments such as EPF and ETF.
Petitioners state that irreparable loss and damage would be caused to the Petitioners and the instant application be rendered nugatory unless the Supreme Court grant and issue interim.
They are asking the Court to grant and issue a declaration that the purported decision of the 1st and/or 2nd Respondents, to “restrict” in the first instance the accounts of the 1st Petitioner constitutes an infringement of the Fundamental Rights guaranteed to the Petitioners by Article 12(1) of the Constitution.
They are asking the Court to grant and issue a declaration that the failure and and/or refusal to date, of the 1st to 4th Respondents and/or any one or more of them, to release the funds required to meet the expenditure and obligations and keep afloat the 1st Petitioner who is subject to the said “restriction”, despite it having been undertaken by them at the meeting held on 30 January, constitutes an infringement and/or continuing infringement of the Fundamental Rights guaranteed to the Petitioners by Article 12(1) of the Constitution.
