Supreme Court affirms legality of CIESOT for benefit of Ceylinco Insurance employees

• Original Board and status quo of CEISOT ordered to be restored
• Setback for depositors of Golden Key Credit Card Company
• Employees of Ceylinco Insurance hail SC judgment

The Supreme Court yesterday affirmed that the Employee Share Ownership Trust of Ceylinco Insurance (CIESOT) was a legal and a duly-constructed trust belonging to the employees of Ceylinco Insurance and that it is in accordance with the Trust Ordinance of Sri Lanka and also this has been confirmed by the Securities and Exchange Commission (SEC). Through the same order, the Supreme Court also said that the status quo of CIESOT should be restored to the status prior to an interim order delivered on 10 March 2014 and thereby restored the Board of Directors of CIESOT. The Supreme Court judgment was delivered by the five-bench panel headed by Chief Justice K. Sripavan during the hearing of case SC/FR/191/2009 filed by a few depositors of the Golden Key Credit Card Company in the year 2009. CIESOT is owned by the Employees of Ceylinco Insurance and holds a 22.86% stake of Ceylinco Insurance PLC. CIESOT stands for Ceylinco Insurance Employees Share Ownership Trust and this trust fund was created in 2000 for the sole benefit of the employees of Ceylinco Insurance PLC, and was managed by CIESOT Ltd. as the trustee company. The main objective of formulating this scheme was to reward employee loyalty, and accordingly, dividends have been paid to employees every year since 2000. The employees of Ceylinco Insurance hailed the judgment and in a communiqué issued by its Employees Union said that justice had prevailed and that their sweat and efforts to uphold the values inculcated by the management of Ceylinco Insurance had borne fruit. Once dissolved, CIESOT will distribute the money amongst the eligible present and ex- employees of Ceylinco Insurance PLC, who are the beneficiaries of the trust. The position of the employee and the number of years in service will determine the share entitlement and all employee categories, from peons and drivers to the senior management, will be entitled to receive the benefits.