Auction of two British Companies halted by HC

Thursday, 18 November 2010 01:10 - - {{hitsCtrl.values.hits}}

The sale or auction of two British companies by the Seylan Bank scheduled to take place today (Thursday) was restrained by the Commercial High Court of Colombo in the nick of the time.

By S. S. Selvanayagam

The sale or auction of two British companies by the Seylan Bank scheduled to take place today (Thursday) was restrained by the Commercial High Court of Colombo in the nick of the time.

High Court Judge Gamini Amarasekera on Tuesday (16) issued an enjoining order restraining the Defendant Seylan Bank from proceeding with the sale or public auction fixed for today.

This was sequent to the litigation filed by the Plaintiff British companies, namely AMR Investments Private Limited and Supply Room (Pvt) Ltd., which are engaged in manufacturing garments for export.

Court also issued notice of interim injunction returnable for 30 November restraining Seylan Bank from proceeding with the said sale and/or public auction fixed for today.

Defendant Seylan Bank took steps to cause sale or public auction of movable and immovable properties of the Plaintiff valued to the tune of Rs. 500 million for recovery of loans.

S. A. Parathalingam PC with Nishkan Parathalingam instructed by Gunawardena and Ranasinghe Associated contended that the Defendant Bank had failed to comply with the Recovery of Loans by Banks (Special Provisions) Act.

He submitted that the Defendant had failed to give due and proper notice in terms of the said act to all sectors of the public of the said purported sale fixed for today and to comply with its legal and equitable obligation to attempt to secure the best possible price for the property sought to be sold by public auction.

In the plaint, it is stated that the 50% of the shareholding of the 1st and 2nd Plaintiff Company is held by Arthur Hathom Jr. and the balance 50% by Robert Patrick Hurst and his wife Monica Bennion.

Hurst is the Chairman of these companies who caused the management and the day-to-day running of the Plaintiff’s business to be controlled and handled by one David Rose, who is a principal shareholder and director of another company based in Sri Lanka.

Consequent to Rose taking over the management of the Plaintiff Companies, Hurst went to the United Kingdom to concentrate on marketing the goods and products.

Plaint stated that the said Chairman of the Plaintiff Companies arrived in Sri Lanka on 22 October and came to know that the Defendant had caused to be published an advertisement in newspapers whereby the properties of the Plaintiffs was scheduled to be sold by the Defendant Bank at a public auction to be held today.