Shareholder joint MD takes Country Style Foods dispute to court

Monday, 28 November 2016 00:18 - - {{hitsCtrl.values.hits}}

Country Style Foods Ltd, manufacturers and marketers of fruit juices under the renowned brand name ‘SMAK’, and its Directors S.D Alahakoon and D. W. Y. Kumanayake have been taken to court by one of its subscriber shareholders and joint Managing Directors W. D. Alahakoon on 9 of November 2016 under Section 224 of the Companies Act No. 7 of 2007.

Country Style Foods Ltd, a company incorporated in 1980 which commenced from a family business from humble beginnings, grown from strength to strength and held a unshakeable monopoly in the fruit drink segment of the beverage industry in Sri Lanka for a considerable period of time.

The legal team for the Petitioner W. D. Alahakoon comprising of President’s Counsel Dr. Harsha Cabral, Kushan Illangathilke, Nishan Premathiratne and Janith Fernando, Attorneys at Law who appeared on the instructions of V. W. Kularatne Associates submitted to court that the Petitioner W. Dharmasiri Alahakoon, a 33% shareholder holding 16,667 shares of Country Style Foods Ltd and who, according to the Petition, was instrumental in setting up the company in 1980 and created the brand name ‘SMAK’.

It was submitted to court that the Petitioner has now been sidelined from the decision making process of the company by his two brothers, S. D. Alahakoon and D. W. Y. Kumanayake who are also shareholders and Joint Managing Directors of the company, which has resulted in the performance of the company deteriorating.

On this basis, the Petitioner through the Petition complained to court that a hostile environment has already been created within the company making it problematic for the Petitioner to continue to work and therefore sought from court a declaration that the Petitioner had been oppressed by the conduct of the other two shareholders, who are Joint Managing Directors of the Company and seeking further orders directing the other Shareholders/Joint Managing Directors to purchase the Petitioner’s shares at a value determined by an Independent Auditor of the Company or in the alternative to wind up the company.

The Commercial High Court issued summons for the two Shareholders/Joint Managing Directors to be return on 19 January 2017.