Three Seylan directors resign
2008-10-01 11:29:05

Three Seylan Bank executive directors including its deputy chairman R. Renganathan resigned on Tuesday in keeping with new Central Bank regulations dealing with the ages of the directors and the number of directors in Licensed Commercial Banks (LCBs), Seylan Bank sources said on Wednesday.

“Mala Sabaratnam and A. D. Jegasothy have also resigned,” a Seylan source told TimesOnline. He said this decision was taken to balance the proportion of the executive and non executive directors on the bank board. The three directors are executive directors. Banks and stockmarkets are on holiday today owing to the Moslem Ramazan festival and thus this decision was not intimated to the Colombo Stock Exchange where Seylan is a listed stock.

This is probably the first time directors of a bank are stepping down to conform to the new Central Bank rules. Under the new corporate governance rules, Section 3 (2) deals with the director board's composition in LCB's, where it is said that the total period of service of a director other than a director who holds the position of CEO shall not exceed nine years and that such period in office shall be inclusive of the total period of service served by such a director upto January 1st , 2008.

In the case of two or more directors whose service is in excess of nine years as at this date, the directive says that the longest serving shall resign by the end of 2008 and thereafter, at the end of each succeeding year, the remaining directors need to vacate office in sequence at least one director each year, on the basis of the longest to the shortest length of service as a director, until all who served in excess of nine years as at January 1st, 2008 resign.