- Perpetual subsidiary W.M. Mendis files Fundamental Rights petition contesting the Central Bank freezing 24 bank accounts
The Supreme Court on Thursday fixed for support on 11 October the granting of leave in respect of the fundamental rights petition filed by W.M. Mendis & Company Ltd. contesting the freezing of its bank accounts by the Central Bank.
The bench comprised justices Sisira J. de Abrew, Nalin Perera and Lalith Dehideniya.
W.M. Mendis & Company Ltd, asubsidiary of Perpetual Capital Holdings, has filed a Fundamental Rights violation petition before the Supreme Court contesting the restriction on its accounts by the Monetary Board of the Central Bank.The petition was filed by the company and its Chairman Arjun Aloysius citing the Monetary Board, Central Bank Governor Dr. Indrajit Coomaraswamy, Deputy Governor C.J.P. Siriwardana, Acting Director of the Department of Supervision of Non-Bank Financial Institutions W. Ranaweera, Perpetual Treasuries Ltd. and the Attorney General as respondents.
The first petitioner company Mendis & Company Ltd. was established in 1947 and is engaged in the business of distilling, manufacturing, bottling, distributing and marketing a variety of spirits in the country and is a 99%-owned subsidiary of Perpetual Capital Holdings Ltd.The petitioners state that the accounts maintained at licenced banks and CDS accounts maintained in the Colombo Stock Exchange by the individuals and entities related to Perpetual Treasuries Ltd. have been restricted.
They state that the said “restriction” had been imposed on 24 bank accounts of the first petitioner company.
They state that in the meantime the Chief Executive Officer (CEO) of the first petitioner,through a letter dated 29 January 2018, informed the Central Bank Governor that the restrictions placed on the bank accounts of the first petitioner have had a direct and severely detrimental impact on the business of the company, in as much as the company was unable to make or meet inter alia: statutory commitments to the Sri Lankan Government (Excise and VAT); commitments to banks and state banks, mainly the Bank of Ceylon and People’s Bank (loan instalments, interest payments and future facilities from banks); commitments to suppliers and risk from frustrated suppliers and commitments to employees.
The petitioner states that it was requested that the said restrictions be removed particularly considering the magnitude of the impact, resulting in the loss of livelihood of the employees of the first petitioner.
The petitioners lament that the respondents failed or refused to release the requisite funds to keep inter alia the first petitioner company afloat, despite agreeing to do so at the meeting held on 30 January 2018 with the CEO of the first petitioner.
They said that in order to investigate the financial affairs of the first petitioner there was no need or requirement to freeze or restrict the bank accounts of the first petitioner and alleged that thus the decision to freeze the said accounts amounted to a mala fide and corrupt act designed to cripple the business activities of the first petitioner.
The petitioners state that the first petitioner company has a staff of 323 employees and that the company is unable to pay their salaries and statutory payments such as EPF and ETF.
The petitioners state that irreparable loss and damage would be caused to the petitioners.
They are asking Court to issue a declaration that the purported decision of the first andsecond respondents to “restrict” in the first instance the accounts of the first petitioner constitutes an infringement of the Fundamental Rights guaranteed to the Petitioners by Article 12(1) of the Constitution.They are asking the Court to issue a declaration that the failure or refusal to date of the first to fourth respondents or any one or more of them to release the funds required to meet the expenditure and obligations and keep afloat the first petitioner, who is subject to the said “restriction” despite it having been undertaken by them at the meeting held on 30 January 2018, constitutes a continuing infringement of the Fundamental Rights guaranteed to the petitioners by Article 12(1) of the Constitution.
President’s Counsel Gamini Marapana with Nalin Marapana appeared for the petitioner company Mendis & Company Ltd., while Senior Additional Solicitor General YasanthaKodagoda appeared for the Attorney General.