Commercial High Court issues summons for charge of contempt of court against Mascons Ltd. Directors

The Commercial High Court of Colombo recently issued summons for the charge of contempt of court against the Directors of Mascons Ltd: Sivamohan Sathiamoorthy, Sathiamoorthy Subramaniam, Sashitharan Ganeshan, and Sathiamoorthy Hari Darshan.

The Petitioners filed a contempt of court Application in Case No. HCC 31/2018/CO on the basis that Mascons had continuously failed to comply with the Interim Order issued by the Commercial High Court, and moved the Court to issue contempt summons on Sivamohan Sathiamoorthy, Sathiamoorthy Subramaniam, Sashitharan Ganeshan, and Sathiamoorthy Hari Darshan, who currently function as the Board of Directors of Mascons.

Ruwan Fernando J issued summons on the Directors of Mascons, upon hearing an Application made on behalf of Petitioners Mahenthiran Subramaniam and Amirtha Gowrie Mahenthiran (shareholders of Mascons) through which the Petitioners maintained that the Directors of Mascons had failed to comply with an Interim Order dated 8 May 2018, issued by the Commercial High Court against Mascons.

Thereafter, the Petitioner by a Motion dated 7 December 2018 also made the Court aware of a further statement which had been made by Sathiamoorthy Subramaniam, in grave disrespect to the authority of the Court, and urged the Court to make further inquiries in to the same.

Sivamohan Sathiamoorthy, Sashitharan Ganeshan, and Sathiamoorthy Hari Darshan appeared in person on 10 December 2018 in response to the summons issued on them by the Court, and a Medical Certificate was submitted on behalf of Sathiamoorthy Subramaniam, who could not be present in person before Court due to ill health. Thus, the Accused were advised to appear in person on the next date of inquiry, where they would be required to plead whether they are guilty or not guilty to the charge of contempt of court. An offender who is found guilty of a charge of contempt of court may be sentenced to jail for a period not exceeding five years, and such imprisonment shall be simple or rigorous as the Court shall direct. The counsel for the Accused also recorded that he wished to take up a Jurisdictional Objection in this matter. Accordingly the case was re-fixed for 28 February 2019 for inquiry.

The contempt of court proceedings was initiated in the background where the Petitioners initiated Case No. HCC 31/2018/CO in May 2018, on the basis that though Mahenthiran Subramaniam functioned as a Joint Managing Director of Mascons, he had over a period of time been excluded from the day-to-day management of the company by Sivamohan Sathiamoorthy and Sathiamoorthy Subramaniam, who along with Mahenthiran Subramaniam function as the Board of Directors of Mascons.

The Petitioners through their petition maintained that, despite several requests from Mahenthiran Subramaniam, the company had failed to provide Mahenthiran Subramaniam with information/financial/documentation pertaining to Mascons as he is lawfully entitled to, given his position as a Joint Managing Director of Mascons.

Furthermore, the Petitioners through their petition stated that due to the company’s continuous refusal to provide Mahenthiran Subramaniam with the requested information, that the Petitioners made inquiries and were shocked to discover several acts of mismanagement committed by the de facto management of Mascons.

The Petitioners through their Petition specifically drew the attention of the Court to dealings between Mascons and one of its associate companies, Sealcore Stainless Steel Industries Ltd., whereby through certain practices the de facto management of Mascons was utilising the company for the sole benefit of Sealcore. The Petitioners stressed that these acts were troubling, given that Sivamohan Sathiamoorthy and Sathiamoorthy Subramaniam also function as Directors of Sealcore, in which a large portion of the shareholding is held by Sivamohan Sathiamoorthy, Sathiamoorthy Subramaniam and members of their immediate family.

The Commercial High Court, on hearing the Petitioners’ Application in the first instance ex parte, granted Interim Orders against Mascons, and also Sealcore, whereby the companies were directed to disclose certain information/financials/documentation to Mahenthiran Subramaniam.

Subsequently, Mascons, and Sealcore appearing before the Commercial High Court raised several preliminary objections to the Interim Orders issued in favour of the Petitioners. The Commercial High Court thereafter upon consideration of all matters placed before Court overruled the objections raised by Mascons, and Sealcore, directing the companies to comply with the interim Orders issued by the Commercial High Court.

The Petitioners were represented in Court by Dr. Harsha Cabral, President’s Counsel, who appeared with Counsels Nishan Premathiratne and Nadun Wijayasriwardena on the instructions of Julius and Creasy Attorneys-at-Law.

Mascons, Sealcore and the Accused were represented in Court by Romesh De Silva PC who appeared with Counsels N. R. Sivendran and Renuka Udumulla on the instructions of D. L. and F De Sarams Attorneys-at-Law.