In reference to an article in The Sunday Times FT of 25 January 2009 titled 'George Steuarts former chief, director file action', George Steuart & Company (Pvt) Ltd Group Deputy Chairman Kandiah Neelakandan issued a letter to the paper in order to clarify points in the article.
Referring to last week's news item which stated that 'allegations of a continuing and major fraud being perpetuated by the directors of George Steuart & Company Ltd have been made,' Mr. Neelakandan said that nowhere in the pleadings filed in the case is there a reference to allegations of a major fraud being made. Furthermore, he stated that the first petitioner Scott Dirckze is also a director of the company and his alternate on the board of the company is the second petitioner, K.M. de Silva.
Mr. Neelakandan went on to say that 'in any event, certain allegations made in the petition in that case are not substantiated by any specific allegation of fraud or by the documents filed therewith. Both petitioners have chosen not to attend meetings of the Board of Directors of the company for a long time (for more than three years) and not to raise any allegations against the management of the company.'
Mr. Neelakandan also said statements about D.P. Kanagaratnam who is the Deputy Chairman and Company Secretary are misleading. He added that Mr. Dirckze has been harassing Mr. Kanagaratnam with whom he has been litigating. 'It is unfortunate that Mr. Scott Dirckze refuses to accept reality because he has a personal vendetta against Mr. Kanagaratnam.'
Mr. Neelakandan stated that the action has not yet been instituted. In terms of Section 234 of the Companies Act No. 7 of 2007, any person who wishes to institute a derivative action should in the first instance obtain the leave of the Court. Mr. Neelakandan said the petitioners have not yet been granted such leave, adding that when counsel for the petitioners moved to support the application on December 4, 2008, senior Counsel for the company Mr. K. Kanag-Isvaran and some of the directors pointed out that the correct procedure has not been followed. Then the Court directed Counsel for the petitioners to give in the first instance notice of the application to the respondents and support the application on 27th January 2009.
Mr. Neelakandan stated that when the case was taken up on January 27, Mr. Kanag-Isvaran and four other respondents and Romesh De Silva, Senior Counsel for the 5th and 7th respondents raised objections ‘in limine’ that the petitioners cannot seek and obtain leave and the court has directed all parties to file written submissions on the objection ‘in limine’ on February 17.
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