Three weeks after the dramatic Supreme Court judgement, John Keells Holdings (JKH), one of Sri Lanka's leading blue chip conglomerates and at the centre of the storm over an improper privatization deal, continues to remain silent on its intentions and the fate of its Chairman Susantha Ratnayake.
The Supreme Court said Mr Ratnayake 'worked in collusion' with the Treasury Secretary and then Chairman of the Public Enterprises Reform Commission of Sri Lanka, Dr. P.B. Jayasundera in a manner that was 'adverse to the public interest' in the privatization of Lanka Marine Services Ltd (LMSL)
The JKH board, at its only meeting (after the court verdict) for which shareholders are yet to be officially informed of the decisions, has firmly backed Mr Ratnayake and the decisions made on LMSL and rejected any resignation moves.

When contacted, JKH Director Deva Rodrigo told The Sunday Times FT that he is unable to comment on this 'extremely sensitive issue' which may result in contempt of court and also due to the fact that JKH is a publicly listed company. However, he did say that the entire JKH Board has unanimously asked its Vice Chairman Ajit Gunawardena to be the spokesman on this matter. Mr. Gunawardena was unavailable for comment.

Caught between trying to air their views in a way that will not border on contempt of the Supreme Court, JKH directors have been ‘delicately’ reaching out to senior corporate and human rights lawyers and others who matter, to explain their case. “This could be a subtle public relations exercise by JKH aimed at many who have been dismayed by the company to clear the air and show that the Colombo conglomerate is ‘still a good boy,” one business analyst commented.

Meanwhile counsel for the LMSL petitioner Vasudeva Nanayakkara has fired off a series of letters to the Attorney General, the Inspector and Deputy Inspector General of Police, the Chairman of the Commission to Investigate Allegations of Bribery and Corruption and the Director General of the Securities and Exchange Commission (SEC), urging them to 'take necessary action on the basis of the findings' according to the Supreme Court judgement.

The judgement states that the findings 'demonstrate that the action of P.B. Jayasundera, 8th Respondent has not only been arbitrary and ultra vires but also biased in favour of John Keells Holdings Ltd.' It further states that the 'allegation of the Petitioner that he (P.B. Jayasundera) worked in collusion with S. Ratnayake of John Keells to secure illegal advantages to the latter, adverse to the public interest in established.'

The letters to the Inspector General of Police Jayantha Wickramaratne and Deputy Inspector General Sisira Mendis state that in terms of the Offences Against Public Property Act No.12 of 1982, the foregoing warrant immediate action. They include (1) mischief to public property, (2) theft of public property, (3) robbery of public property, (4) misappropriation or criminal breach of trust of public property, (5) cheating, forgery or falsification in relation to public property and (6) attempting to commit any one of the above offences.

Letters to the Chairman of the Bribery Commission Ameer Ismail and SEC Director General Channa De Silva states that 'our client is appalled by the fact that even in the face of the Supreme Court judgement, you have failed and neglected to date, now for a period of over three weeks, to have taken warranted action in terms of the law, to enforce the rule of law, irrespective of the personalities concerned.' Furthermore, the letter states that if action is not taken, Mr. Nanayakkara will be compelled to initiate contempt proceedings in the Supreme Court on this matter.

Last week's letter to the Governor of the Central Bank by Counsel for Mr Nanayakkara, stating that Dr. P.B. Jayasundera has disqualified himself from being a member of the Monetary Board of Sri Lanka was left unanswered. The letter addressed to Governor Ajith Nivard Cabraal stated that 'you are aware of the provisions of the Banking Act, which prohibits persons against whom findings have been made by Court of law from holding office of Directors of Banks. In addition recently you have introduced mandatory Codes of Conduct fro Directors of Banks.'

A lawyer explained that the rationale behind the letter was that the Monetary Board supervises whether others can hold office as directors of banks and according to the new Companies Act, there is a provision which clearly states that if a director is found guilty in a court of law, the person is not fit to hold the office of a director of the company. This should also apply to the CB.

However, the Secretary to the Treasury is an ex-officio member of the Monetary Board and as long as Dr. Jayasundera remains Treasury Secretary, he will also remain on the Monetary Board. In addition, the CB Governor does not have any power under the law to remove Dr. Jayasundera from the Board. (NG).