Commercial High Court issues interim orders against Global Grange Lanka and Directors

Following an application made by two directors of Global Grange Lanka Ltd, Raj Matharu and Harpal Matharu, the Commercial High Court of Colombo on 16 May granted interim orders restraining the company and its other directors from preventing the two men from acting as directors. 

The court also prevented Priya Matharu and Tara Matharu from acting as directors of the company.

The petitioners, Raj Matharu and Harpal Matharu, were represented in Court by Kuvera de Zoysa President Counsel along with Nishan Premathiratne and Ameer Mahuroof, who were instructed by Sanjay Fonseka.

The petitioners together with their brother Tejinderpal (Tony) Matharu are collectively ranked the 130th richest men in the United Kingdom with a collective net worth of approximately £ 1 billion and are the owners of the premier Grange Hotel chain in the United Kingdom. 

Complaining that they had been wrongfully and unlawfully removed as directors from their Sri Lankan company, Global Grange Lanka Ltd, the petitioners filed action in the Commercial High Court of Colombo naming as respondents their brother Tony, their Sri Lankan associate Kalyanawansa Hettiarachchi, Deepkia Hettiarachchi, Priya Matharu and Tara Martharu amongst others.

The petition stated inter alia that the three brothers initially set up Global Grange Lanka Ltd. with the intention of expanding their business to Sri Lanka. The company was incorporated with the assistance of Kalyanawansa (Wansa) Hettiarachchi who was a Sri Lankan associate introduced to the petitioners by their brother Tony. It was also agreed that Wansa would carry out the affairs of the Sri Lankan company subject to the direction and control of the Matharu brothers. Accordingly, a land in Galle was purchased by Global Grange Lanka in 2006 with the total investment being made by the Matharu brothers. Thereafter, upon representations being made by Wansa to dispose of the land for a profit, the brothers agreed to do so.

The petitioners further stated that they were told that the land was sold for roughly Rs. 70 million whereas subsequently a representative of the company who purchased the land indicated that a further sum of roughly Rs. 33 million had been paid to Wansa through bank draft. It also came to light that Tony Matharu had been working with Wansa to siphon the money due to the company. 

Subsequently, the petitioners had become aware after a search at the Registrar of Companies that Wansa and Tony Matharu had surreptitiously taken steps to appoint two new directors, Priya and Tara Matharu, without informing the petitioners. The new directors are the daughters of Tony Matharu. Thereafter, further steps were taken to use the newly-appointed directors to remove the petitioners as directors.

It was submitted to Court on behalf of the petitioners that the removal of the petitioners as directors was part of a scheme by the respondents to cover up the misappropriation of money which was due to the company. The petitioners complained to court that the appointment of the directors was illegal and contrary to the Articles of Association and the Companies Act No. 7 of 2007. The complaint also stated that the subsequent removal of Raj and Harp Matharu (the petitioners) was illegal. It further contended that the said new directors, Priya and Tara, were never in the country at the time that a purported resolution was passed to remove the petitioners as directors and that the signatures on the resolution had been fraudulently placed there.

Following the submissions made to Court, Judge Ruwan Fernando of the Commercial High Court on 15 May granted orders restraining the purported new directors Priya and Tara from functioning as directors in terms of the Companies Act and issued a further other restraining the respondents from preventing the petitioners from functioning as directors of Global Grange Lanka Ltd.