M.R. Shah quits as Chairman of MBSL Insurance amidst concerns
Friday, 29 November 2013 00:38
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Merchant Bank of Sri Lanka (MBSL) Chairman M.R. Shah has yesterday tendered his resignation as the Chairman and Director of the subsidiary MBSL Insurance Ltd., giving a new twist to the on-going internal dispute.
Following is the full text of Shah’s resignation letter:
I note with concern that some of the Directors of MBSL Insurance Co. Ltd. have unlawfully, with insufficient notice, convened a meeting of the Board of Directors, despite the intimation of some Directors of their inability to attend, to be held at the Sri Lanka Foundation on 28 November, 2013, at 9 a.m., at which it is also proposed to review the decision placing the Managing Director and CFO on compulsory leave.
I also note that this meeting has been convened bypassing the Company Secretaries, in order to unlawfully accommodate Prof. Ranjith Bandara, who is no longer a Director of the company, since the Parent, Merchant Bank of Sri Lanka (PLC) has already nominated another Director in his place consequent to his resignation from the MBSL, which was formally approved by the IBSL and the Form 20 has been duly filed with the Registrar of Companies. It is clear that this move has been initiated in order to wrongfully secure the majority on the Board.
The Company Secretaries have very categorically informed all directors that they were unable to convene any board meeting until legal advice sought for Prof. Ranjith Bandara’s claim as a Director. In this situation, I understand that the Company Secretaries too are resigning as secretaries since they do not wish to compromise professionalism.
The Managing Director was placed on compulsory leave on a unanimous decision of the Board on 20 November, 2013, in order to facilitate an independent investigation by Price Waterhouse Coopers to be carried out into the irregularities in the commission payments reported by the internal audit investigations together with IBSL’s observation about irregularities in connection with the foreign employment agency insurance scheme and seeking explanation from the Board of Directors on non-disclosure of related party transaction with regard to Lanka Corrugated Industries Ltd. and furnishing inaccurate information in annual returns etc, by letter dated 7 November, 2013.
While inviting attention to the proposal made by some of the Directors to lift the compulsory leave of the Managing Director and CFO at the meeting on 25 November, I reiterate that any attempt at this point of time to lift the compulsory leave would certainly not facilitate the independence of the investigations and in the eyes of the public, it could be perceived as endorsing corruption.
While I do not endorse or promote malpractices and corruption in any form and in that context, do not wish to be a party as well, to a resolution to review the original decision to place the Managing Director and the CFO on compulsory leave, since it could cause serious reputational risk not only to the Board of Directors of MBSL Insurance but also to the Merchant Bank of Sri Lanka as the major shareholder, its subsidiaries and me as well.
In view of the above developments, I tender my resignation as the Chairman and Director of MBSL Insurance Co. Ltd. with immediate effect.
