Ex-employees case against Seylan Bank: Court permits to question Chairman

The District Court of Colombo on 5 March has issued an Order compelling the Chairman of Seylan Bank to answer a set of interrogatories served by a group of ex-employees requesting the Chairman to personally answer by way of an Affidavit.

A group of ex-employees of Seylan Bank has filed several cases against the bank before the District Court of Colombo as well as before the Commercial High Court based on six trust deeds. The employees position through these cases is that the beneficiaries of the Employee Share Trust Schemes are the employees and the those trusts were created by the former management of Seylan Bank PLC to provide further benefit to the employees over and above the gratuity entitlement upon their cessation of service.

The Plaintiffs of DTR 154/2016 and DTR 156/2016 served a set of interrogatories on the Chairman of Seylan Bank. Pursuant to that the Defendant Bank vehemently objected to the interrogatories being served on its Chairman. 

The Learned Additional District Judge of Colombo, Rashantha Godagama having considered the submissions tendered by both parties, issued an Order in favour the Plaintiffs compelling the Chairman of Seylan Bank to answer the interrogatories within 10 days of the Order. 

Questions such as “whether the bank has requested the Plaintiffs to renounce their rights to Employee Share Trusts in order to obtain their balance gratuity payment” are included in the interrogatories which are to be answered by the Chairman of Seylan Bank.

Accordingly, the Chairman of Seylan Bank is required to answer the interrogatories by way of an Affidavit. In the event the Chairman fails to answer the interrogatories, the matter can be fixed exparte against Seylan Bank and also can be held liable for contempt of Court. 

These two cases are among a series of cases filed by a group of ex-employees of Seylan Bank claiming that the bank is unlawfully holding voting shares of Seylan Bank under employee share trust schemes which are for the benefit of the employees. The Commercial High Court has issued an Interim Order in 2017 suspending the voting rights on 12,752,994 voting shares held by the six trust companies of Seylan Bank. 

The Plaintiffs were represented by Counsels Nishan Premathiratne with Pravi Karunaratne instructed by Sanjay Fonseka, Attorney-at-Law. The Defendant was represented by Manjuka Fernadopulle instructed by Malin Rajapakse, Attorney at Law.