Ceylinco Insurance urges court to disregard criminal actions of directors, focus on progress of comp

Thursday, 14 May 2015 02:32 - - {{hitsCtrl.values.hits}}

By Channa Fernandopulle

Ceylinco Insurance Plc urged the Commercial High Court to disregard criminal charges levelled against its directors and focus instead on the progress made by the company in relation to minority shareholder rights.

Romesh De Silva PC appeared on behalf of Ceylinco’s subsidiaries in an oppression and mismanagement case filed against the insurer by one of its largest shareholders, Global Rubber Industries (GRI).

Noting that such an action on the part of minority shareholders must seek to prove oppression and/or mismanagement as defined by the Companies Act, De Silva argued that violations of other statutory provisions, such as the Regulation of Industries Act (RII) or the criminal actions of a particular director did not constitute a violation of the Companies Act.

GRI and its legal team had previously sought interim orders against Ceylinco Insurance on several grounds including the alleged violation of section 33A of the RII which stipulates that only a maximum of one-third of directors of an insurance company may serve as employees, a condition which the current Board of Directors does not follow.

De Silva claimed that such issues did not fall under the ambit of the Commercial High Court but ought to be left to the industry regulator to make a determination on.

Meanwhile, commenting on efforts by minority shareholders to appoint Dinesh Weerakkody and Anil Amarasuriya to the Board of Directors of Ceylinco Insurance, De Silva argued that since Weerakkody is the son-in-law of current Minister of Public Order John Amaratunga while Amarasuriya is the first cousin of former Foreign Minister G.L. Peiris, both ought to be exempted from such appointment in order to avoid politicisation of Ceylinco Insurance.

De Silva will continue his submissions when the Commercial High Court takes up the case on 20 May 2015.