Financial Times

Appeal Court stays Pramuka liquidation for second time
The Appeal Court last week allowed an application by the Pramuka Bank Depositors and Stakeholders Association (PBDSA) to stay proceedings in the District Court of Colombo where the Central Bank has sought an order to liquidate Pramuka - until the Appeal Court case is heard.

M.A. Sumanthiran, counsel appearing for the petitioner, Palitha Gamage, president of the PBDSA told court that the first respondent-Monetary Board had failed to make an order to suspend the operations of Pramuka. It had also failed to cancel the license as the Board was hasty to wind up Pramuka, he said.

He said the Central Bank was not prepared to listen to anybody, not even to Court and it (CB) had failed to follow the direction of the court and all the evidence pointed to a situation where the Monetary Board was least interested in the restructuring. During the conditional operations of the Pramuka Bank, the Central Bank has admitted that a further Rs 84 million was recovered and the funds that were 46 percent of the deposits have gone up to 70 percent showing that Pramuka could proceed, if allowed.

The Bench comprised of Justices P Wijeyaratne and K Sripavan. Milinda Goonatillaka State Counsel appeared for the 1st and 2nd Respondents (Central Bank). M A Sumanthiram with Viran Corea instructed by Mohan Balendran of S. Suntheralingam and Balendran Associates appeared for the Petitioner.

On an earlier occasion last year, the Appeal Court had stayed the liquidation of Pramuka at the request of the depositors and had asked the Monetary Board to see whether the failed bank could be restructured.

Meanwhile the Central Bank also announced on Friday that the Appeal Court has issued an interim order staying the decision of the Monetary Board to cancel the licence of Pramuka Bank and wind up its affairs.

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