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Hatton National Bank (HNB) one of the leading licensed commercial banks which is now largely owned, controlled and governed by the the Government of Sri Lanka will soon carry out an investigation of the entire employees from today on who leaked out the Director's email conversations about 'Financing a Deal of Prabhash Subasinghe to take control of Ceylinco Insurance.'
Accordingly the Human Resources Department of HNB insiders said the bank will first carry out an investigation on whether there are 'Unethical employees' who works at IT Department of HNB Bank who may be sharing email communications of the bank from email server and other IT related systems going against the bank policy.Further bank will officially check out whether the bank's internet and email service providing company is leaking out bank communication details to third parties.
The move came after a former HNB ex-worker Senarath Bandula Abeysekara - The Petitioner has stated that he became aware by an email communication authored inter alia on behalf of the Jonathan Alles of HNB by the Chief Operating Officer and/or the Senior Manager Planning and/or the Chief Manager Planning and Investments of HNB, the said MoU has been circulated among the Board of Directors of HNB.
According to Abeysekara the MoU also refers to HNB financing Global Group to acquire a 70% shareholding of Ceylinco Insurance as well. In the purported shareholder agreement, the parties have agreed to provide two Board positions of Ceylinco Insurance to HNB, chairmanship to Global Group as well as merge Ceylinco Insurance with 16th Respondent (HNB Assurance).
The Petitioner stated that the shares of Ceylinco Insurance initially sought by the HNB and 13th, 14th and 15th Respondents are the shares currently held by CIESOT, which holds a 22.86% stake in Ceylinco Insurance. CIESOT as per Supreme Court order in a Fundamental Rights case on Golden Key Credit Card Company, had been placed with strictures.
In that context, in the HNB email communication, possible investment in Ceylinco Insurance being part of Ceylinco Group had been termed “bad investment”.Other risk factors flagged off include corporate governance issues, differences in managing cultures, legal cases pending CEISOT stake in Ceylinco Insurance and impact on capital adequacy ratios if the investment in Ceylinco Insurance is made.
In the light of the above, the Petitioner had alleged that it was evident that the bank was to pursue a potentially seriously prejudicial act by seeking to enter into a transaction by pre-empting a Court order as well as the purported MoU would have created a direct effect on the shares and on the credibility and worth of HNB as it will be perceived that HNB is directly/indirectly dishonestly colluding with a party to secure a favourable order from the Supreme Court to give effect to the said MuU.
Among other matters raised is as a licensed commercial banker HNB could be failing it is fiduciary duty towards its depositors and shareholders and the bank and/or management have failed to duly comply with and/or follow the accepted legal norms pertaining to corporate governance in deciding whether to enter into a transaction of this magnitude and that the impugned transaction would substantially alter the nature and character of the bank’s business and in all probability would amount to a major transaction under the terms of the Companies Act No. 7 of 2097 and thus requires the approval of its shareholders by way of a special resolution.
The Petitioner also alleged that the bank has ignored that a significant number of the employees of Ceylinco Insurance have sought to challenge the seizure of the shares of Ceylinco Insurance held by CEISOT.
The Commercial High Court granted the Petitioner’s right to seek leave to bring proceedings on behalf of the Company, restrain the 1st to 12 Respondents from executing the said MoU until a final order is made by the Supreme Court with regard to the CEISOT shares as well as issue notice of this application on the Respondents.
Earlier on in his submissions to Court, the Petitioner also stated that he joined HNB around 1978 and was elected President of Ceylon Bank Employees Union HNB Branch and was Senior Vice President of CBEU in 2010. In August 2000 the 1st Respondent (Bank) terminated the service of the petitioner on certain alleged misconduct committed in the capacity of a member of the CBEU Branch Union. The Petitioner stated that he had instituted legal action against the 1st Respondent in Labour Tribunal in June 2013 and an order delivered that the termination of the Petitioner was unjust and inequitable. The said order has been appealed to the High Court by the Petitioner seeking to enhance compensation awarded and the 1st Respondent Bank has appealed to have the said order set aside.
Accordingly the Human Resources Department of HNB insiders said the bank will first carry out an investigation on whether there are 'Unethical employees' who works at IT Department of HNB Bank who may be sharing email communications of the bank from email server and other IT related systems going against the bank policy.Further bank will officially check out whether the bank's internet and email service providing company is leaking out bank communication details to third parties.
The move came after a former HNB ex-worker Senarath Bandula Abeysekara - The Petitioner has stated that he became aware by an email communication authored inter alia on behalf of the Jonathan Alles of HNB by the Chief Operating Officer and/or the Senior Manager Planning and/or the Chief Manager Planning and Investments of HNB, the said MoU has been circulated among the Board of Directors of HNB.
According to Abeysekara the MoU also refers to HNB financing Global Group to acquire a 70% shareholding of Ceylinco Insurance as well. In the purported shareholder agreement, the parties have agreed to provide two Board positions of Ceylinco Insurance to HNB, chairmanship to Global Group as well as merge Ceylinco Insurance with 16th Respondent (HNB Assurance).
The Petitioner stated that the shares of Ceylinco Insurance initially sought by the HNB and 13th, 14th and 15th Respondents are the shares currently held by CIESOT, which holds a 22.86% stake in Ceylinco Insurance. CIESOT as per Supreme Court order in a Fundamental Rights case on Golden Key Credit Card Company, had been placed with strictures.
In that context, in the HNB email communication, possible investment in Ceylinco Insurance being part of Ceylinco Group had been termed “bad investment”.Other risk factors flagged off include corporate governance issues, differences in managing cultures, legal cases pending CEISOT stake in Ceylinco Insurance and impact on capital adequacy ratios if the investment in Ceylinco Insurance is made.
In the light of the above, the Petitioner had alleged that it was evident that the bank was to pursue a potentially seriously prejudicial act by seeking to enter into a transaction by pre-empting a Court order as well as the purported MoU would have created a direct effect on the shares and on the credibility and worth of HNB as it will be perceived that HNB is directly/indirectly dishonestly colluding with a party to secure a favourable order from the Supreme Court to give effect to the said MuU.
Among other matters raised is as a licensed commercial banker HNB could be failing it is fiduciary duty towards its depositors and shareholders and the bank and/or management have failed to duly comply with and/or follow the accepted legal norms pertaining to corporate governance in deciding whether to enter into a transaction of this magnitude and that the impugned transaction would substantially alter the nature and character of the bank’s business and in all probability would amount to a major transaction under the terms of the Companies Act No. 7 of 2097 and thus requires the approval of its shareholders by way of a special resolution.
The Petitioner also alleged that the bank has ignored that a significant number of the employees of Ceylinco Insurance have sought to challenge the seizure of the shares of Ceylinco Insurance held by CEISOT.
The Commercial High Court granted the Petitioner’s right to seek leave to bring proceedings on behalf of the Company, restrain the 1st to 12 Respondents from executing the said MoU until a final order is made by the Supreme Court with regard to the CEISOT shares as well as issue notice of this application on the Respondents.
Earlier on in his submissions to Court, the Petitioner also stated that he joined HNB around 1978 and was elected President of Ceylon Bank Employees Union HNB Branch and was Senior Vice President of CBEU in 2010. In August 2000 the 1st Respondent (Bank) terminated the service of the petitioner on certain alleged misconduct committed in the capacity of a member of the CBEU Branch Union. The Petitioner stated that he had instituted legal action against the 1st Respondent in Labour Tribunal in June 2013 and an order delivered that the termination of the Petitioner was unjust and inequitable. The said order has been appealed to the High Court by the Petitioner seeking to enhance compensation awarded and the 1st Respondent Bank has appealed to have the said order set aside.
