Financial Times - Pandemonium at Vanik EGM over ‘quit-Meegoda’ resolutions

Justin Meegoda, CEO of Vanik Inc Ltd was opposed vehemently by the shareholders and huge pandemonium created at the extra ordinary general meeting (EGM), called by Carekleen (Pvt) Limited and Premier Investment (Pvt) Limited, each holding 10 percent stake of the company, to remove the CEO along with the two directors, witnesses said.

M. Mohamed Mohideen, a minority shareholder of the company, who was vociferous at the EGM last week, told The Sunday Times FT that the EGM was called ‘essentially to remove the two directors - Ms. Mano Alles and Dr. W. M. Tillakaratna (chairman) – and Meegoda from the Vanik directorate.

“Before the meeting started, I requested the Chairman (of the meeting) to vacate his seat, because the EGM was held to remove him from his designation. I pointed out that it was unethical for him to chair the meeting when it was about removing him from chairmanship,” he said. He said that Meegoda was exercising undue influence and bulldozing his way through the procedures. “Another participant at the meeting raised a point saying that the new directors who were to be appointed in place of the current office bearers have not accepted their consent for appointment in this regard,” Mohideen said, adding that Meegoda had seized this opportunity to give a ruling saying that the EGM did not hold ground. “At this point I asked why he did not raise this issue, before we were called for the meeting”, he said adding that easily there were over 300 shareholders present at the EGM and it was unfair to waste their time, because of such a technical issue.

The Vanik CEO was unavailable for clarification on the fracas at the EGM. A company official said that two requisitions (a kind of resolution) were deposited on June 15 requiring the directors of the company to call up an EGM. “The first requisition dealt with the removal of the directors and the other was to appoint new directors,” he said. He said that under section 185 of the Companies’ Act the removal of a director before his or her expiration period of office requires special notice to be given to the company of the ‘intention to propose such a resolution at a genera; meeting’.

“This was not done prior to the EGM and it became a legal issue,” the official who declined to be named. When asked why the shareholders were not informed about this technical issue, he said the shareholders who moved the resolution should have been more conversant with the legal procedure.

“Also the second requisition which sought the appointment of new directors identified them by their initials and the surname only and there was no other information about them,” he said. He said that C. Wijemanne, M.A.L.A. Fernando and T.B. Wewegama were the names proposed for the new directors.

In June Carekleen and Premier called for a special shareholders meeting to discuss the removal of the three directors alleging mismanagement. Vanik has been struggling through a crisis for the past several years and gone through a restructuring phase earlier.