Magistrate orders Entrust directors to be present in court on May 13
A Colombo Magistrate’s Court was told that due to the lackadaisical supervisory function of the Central Bank (CB) some failed financial companies are allegedly involved in criminal frauds which would place the entire financial health of the country at peril due to losing investor confidence in government-backed securities. On a private plaint filed by C. Noel Shamil Mendis, a depositor of the failed Entrust Ltd and Entrust Securities Ltd, Colombo Magistrate Lanka Jayaratne issued summons on all the directors and some top management of the companies to be present in court on May 13. The complainant alleges that he had entered into an agreement with two Entrust Companies for his deposit to be invested in government securities and the money to be paid to him on maturity.
The two companies have failed and thus have committed offenses of Criminal Breach of Trust and Cheating in terms of the Penal Code, which permits the Magistrate to impose a jail term or a fine if found guilty. The complainant had expressed shock that Entrust Securities being a licensed primary dealer and supposedly being regulated by the CB has indulged in such a fraudulent conduct to date and though the companies have not repaid deposits of the complainant, these companies continue to put notices in the print media canvassing new deposits. His counsel submitted to court that this conduct continues even after the new board of directors has been appointed to Entrust Securities Ltd by their managing agents – National Savings Bank (NSB).
Counsel for the complainant further submitted to court that the fraud has jointly been continued by Entrust Securities and Entrust Ltd due to the lapse in the regulatory and supervisory function of the CB and this lapse on the part of the CB caused a serious dent in investor confidence in government backed securities and placed the entire financial health of the country at peril. The parties summoned to court consist of directors (past and present) of both Entrust Ltd and Entrust Securities and some officials of the National Savings Bank serving on the Board of Entrust and some top management of these companies.
They are R. Dushiyantha Senarath, K.P.N. Sanjeewa Dayaratne, T. Kanagasabai, Chanuka Ratwatte, B.N. Romelo Mendis, I.D. Bandara Dissanayake, C.V.A. Udayasiri Kariyawasam, N.N. Perera Jayasuriya, G.A. Crishantha Nanayakkara, R.M.S. Thilakawardhana, Sivagnanasundaram Jayawarman, A. Aswin de Silva, D.L.W.P..Rohana Abeyratne, A. Kithsiri Seneviratne, S. Navullage, C. Chulendra Hemachandra and A.M. Padmadeva Rajakaruna. The Magistrate ordered that the accused be present in court on May 13 despite objections from the lawyers for the accused-company directors. Jeewantha Jayatilake with Ralitha Amarasena appeared for the complainant while Kalinga Indatissa PC with Ranil Samarasooriya appeared for Entrust Ltd and its directors. Upul Jayasuriya PC appeared for Entrust Securities Ltd and its directors.
| Entrust Capital temporarily barred from business | |
| The Securities and Exchange Commission of Sri Lanka in an announcement on Friday said that Entrust Capital Markets has been temporarily barred from all business activity. The commission said that the company has been ordered to refrain from accepting new clients, carry out purchases, transfer of securities porfolios and also refrain from client withdrawal of funds. |