Commercial High Court dismisses alleged MBES Group oppression and mismanagement

Friday, 11 May 2018 00:00 - - {{hitsCtrl.values.hits}}

The Commercial High Court dismissed a case on 4 May filed by a Director of MBES Group Ltd. seeking relief under oppression and mismanagement.

The Commercial High Court on an ex parte application of the petitioner had earlier issued eight interim orders restraining the MBES, its chairman and the other directors in engaging in certain acts. MBES is a leading wholesale and wholesale distributor in commodities in the Central Province situated in Dambulla.

Thereafter, an application was made by the Chairman, Gamini Pathmasiri Hettiarachchi, and the company to vacate the interim orders granted by the court on the basis that the entire case was misconceived in Law and raised a preliminary objections on the maintainability of the action.

Moreover, the Chairman and the company alleged that the Petitioner, Waidyasekera, has misrepresented and suppressed several material facts to Court in obtaining the exparte interim orders. The MBES and the Chairman appeared through Counsel Nishan Premathiratne who appeared with Pravi Karunaratne, Janith Fernando and Migara Cabral on the instructions of Suba Jayasooriya.

The third respondent, Lanka Menike Sooriyadasa, who is another Director of MBES, appeared through President’s Counsel Ikram Mohamed with Niyomal Senathilaka on the instructions of S.B. Dissanayaka. The fourth respondent, the Company Secretary, was represented by President’s Counsel Padma Bandara with Shanil Rajapakse. Both the third and fourth respondents associated with the application and submissions of the MBES and the Chairman. The Petitioner Shantha Bandara Waidyasekera was represented in Court by President’s Counsel Shanki Parathalingam with Mangala Niyarapola and Kushini Gunaratne Attorneys at Law on the instructions of Tharaka Jayathilaka.

Pursuant to written submissions being tendered by all parties and oral submissions being made, High Court Judge Ahsan R. Marrikar fixed the matter for order. By an order dated 4 May the High Court Judge proceeded to dismiss the entire case of the Petitioner upholding the legal argument in respect of the share ownership taken by the first and second respondents.

The Court also noted that there were several suppressions of material facts made by the Petitioner and the refused to accept the position of the Petitioner that the share ownership which had been effected between a previous shareholder and the second respondent was in fact absorbed to the company considering the legal bar on the MBES to buy back its own shares. Therefore the Commercial High Court dismissed the entire case of the Petitioner with cost in the interim order inquiry and did not proceed to a substantive inquiry on the matter.