Action to prevent Ferntea EGM dismissed

Troubled and crisis ridden Ferntea Limited witnessed a dramatic development recently, when the District Court of Colombo dismissed the action by a Ferntea Ltd-influenced share holder who sought to prevent the holding of an EGM.

District Judge Sisira Ratnayake held that the procedure adopted by the shareholder was incorrect and the shareholder could not carry on with the case. The case was thus dismissed with costs. This also resulted in the enjoining order issued restraining the holding of general meetings of the company been dissolved.

Ferntea Ltd, named as the defendant, did not object to the enjoining order and, until the Jayantha Fernando family intervened in the action, insisted it had not filed any papers objecting to the enjoining order or the interim injunction sought.

The judgment on Friday was a direct result of the Fernando family seeking a dismissal of the action in view of the fact that the company was not taking any steps in the action.

The enjoining order obtained in this case restrained the company from holding any general meeting pending an earlier case where GoldQuest subsidiary Suntex International Holdings Ltd, the majority shareholder was prevented from voting on its shares on account of an exchange control violations in the purchase of shares. Although Suntex the majority shareholder was restrained by the enjoining order it continued to control the board of directors of Ferntea.

However last week, Ferntea chairman Anura Fernando quit after mounting losses and GoldQuest implied in a statement that it was considering exiting from the company.