Interim orders given against two directors of Jayasinghe Furniture Dealers

Monday, 11 January 2016 00:00 - - {{hitsCtrl.values.hits}}

Jayasinghe Furniture Dealers Ltd. recently made an application under the Companies Act No.7 of 2007 seeking to restrain two directors who were the former Chairman and Managing Director of the company.

Jayasinghe Furniture Dealers Ltd, a family-owned business which started trading in 1949, has expanded into a company owning four showrooms in Kandy and a factory in Kandy having a net asset value of over Rs. 300,000,000.

On 22 December 2015, the Commercial High Court in Colombo granted two interim orders against the respective Directors Ariyapala Jayasinghe and Bertie Jayasinghe, restraining them from interfering with the operational affairs of the present Managing Director Ramitha Jayasinghe of Jayasinghe Furniture Dealers Ltd.

This action was instituted by Jayasinghe Furniture Dealers Ltd. and its application to court was supported by lawyers Nishan Premathiratne and Janith Fernando who appeared on the instructions of Sanjay Fonseka.

Premathiratne told court on behalf of the company due to various failures and mismanagement on the part of the two directors, the Board of Directors of the company in terms of the Articles of Association of the company had resolved to unanimously remove them from their respective posts during a board meeting and appoint a new Chairman and Managing Director to manage the affairs of the company on or around 9 November 2015. He also said that Ariyapala Jayasinghe and Bertie Jayasinghe were not removed from the post of Directors.

Furthermore, it was mentioned that pursuant to such board resolution of the company and communication of the same to the two directors, they refused to accept such a resolution and refused to give control of the company to the present Chairman Upali Jayasinghe and Managing Director Mr. Ramitha Jayasinghe.

Furthermore, pursuant to such resolution the two directors Ariyapala Jayasinghe and Bertie Jayasinghe, unlawfully drew funds from the company’s bank accounts.

It was submitted further on 15 December 2015 that the board specifically resolved to confer and empower the new Managing Director Ramitha Jayasinghe with specific functions in carrying on the duties of the Managing Director, nevertheless, Ariyapala Jayasinghe and Bertie Jayasinghe were arbitrarily and unlawfully hanging onto control of the company and not allowing the new Managing Director to carry out the duties as per the board resolution.

Premathiratne told court that owing to the aforesaid reason there was a grave urgency to grant the interim orders as there was an imminent risk to company assets being mismanaged or misappropriated.

After careful deliberation, High Court Judge Amendra Seneviratne ruled that Ariyapala Jayasinghe and Bertie Jayasinghe be prevented from interfering or acting in any manner whatsoever in the discharge of the functions of the new Managing Director.

The matter which came up on 5 January was re-fixed for the objections of the respondents for 11 March.