The Supreme Court granted leave to proceed in the fundamental rights application filled by the Lankaputhra Development Bank Chairman against the Central Bank.
A two-judge Bench headed by the Chief Justice granted leave to proceed in the fundamental rights application filed by Lankaputhra Development Bank Limited (LDBL) Chairman Lasantha Goonewardena, against a decision of the Central Bank Director, Bank Supervision (DBS).
The application challenges the determination of the Director Bank Supervision that Goonewardena cannot be considered as a “fit and proper” person to function as Chairman for disclosing information about the status of the bank at a press conference and for engaging in direct management functions.
Senior Counsel Harsha Fernando, appearing on behalf of Petitioner Goonewardena submitted that under the Baking Act, the DBS has no authority to remove a Chairman. He said that section 42 of the Act only deals with Directors of Bank and the DBS has been acting completely outside the law by attempting to remove the Chairman.
He warned that if regulatory decisions are taken in this manner affecting reputations and employment prospects of key management personnel, the financial sector stability would be affected. Refuting the allegations made against the Chairman, he further submitted that the Petitioner only participated at the press conference referred to by the DBS at the request of the Finance Minister.
Press conference was called by the Minister to inform the public of the parlous situation of the bank when the new management took over and the steps now being taken to improve its financial status.
That, he said, is necessary to rebuild confidence in LDBL. He submitted that all actions of Goonewardena in direct management was as a member of the Board appointed Committees and subject to its overall direction. The petitioner continues to be a director of LDBL.
The Additional Solicitor General, appearing on behalf of the Central Bank, said that a number of new recruitment have been made by the Chairman and several other instance of breach of Central Bank directives have been highlighted in an examination conduced by the Bank Supervision Department that led to the removal of the Petitioner as Chairman.
Attorney-at-Law Harsha Fernando with Shanil Perera, Chamith Senanayaka and Natashiya Noordeen instructed by Jagath Thalgaswattage appeared for the petitioner. Senior Additional Solicitor General, Sanjay Rajarathnam, PC appeared for the Central Bank. The Court fixed the case for argument on May 3 on top of the list.
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