Commercial High Court orders notices on NDB, Directors and EY in Rs. 13.2 b fraud-linked derivative action

Friday, 15 May 2026 06:45 - - {{hitsCtrl.values.hits}}

National Development Bank PLC (NDB) yesterday disclosed that the Commercial High Court of the Western Province has directed the petitioner in case No. 21/2026/CO to serve notice on the bank, its Board of Directors, and its external auditors as at 31 December 2025, M/s Ernst & Young (EY) and its partners, with the matter returnable on 26 May. The Court has also fixed the matter for support by the petitioner.

The disclosure follows a derivative action filed last week by an NDB shareholder against the bank’s leadership and EY in connection with an internal fraud that allegedly resulted in losses of approximately Rs. 13.2 billion.

According to the petition, the Board, acting through its Board Audit Committee (BAC) and Board Integrated Risk Management Committee (BIRMC), had failed to detect, assess, or respond to what was described as an “abnormal escalation” in the CEFTS Inward Suspense Account balance (https://www.ft.lk/front-page/NDB-Board-gets-flack-for-ignoring-high-Rs-12-3-b-receivables-arising-from-CEFT-deals/44-790631).

President’s Counsel Faiszer Musthapha, with attorneys-at-law Shaheeda Barrie, Dayasiri Jayasekara, Shivan Cooray, Thishya Weragoda, Tharaka Nanayakkara, Mehran Careem, Niranjan Arulpragasam, Vinura Kularatne, Nimantha Chandrasena, and Dithya Senaratne, appeared for the petitioner M. Thiyagarajah.

President’s Counsel Ali Sabry appeared for the auditors, while President’s Counsel K. Kanag-Isvaran appeared for NDB. President’s Counsel Romesh De Silva appeared for the Directors of NDB.