Thursday, June 14, 2012

Are Government Directors Personally Liable For HDL Debts Of Around Rs. 7 b?

June 14, 2012

Public interest activist Nihal Sri Ameresekere has filed papers in the District Court of Colombo asserting that the Government Directors of HDL, who managed and controlled HDL had breached mandatory provisions of the Companies Act No. 7 of 2007, and that as a consequence they are personally liable for the debts of HDL, which are in excess of its assets. The Companies Act mandates the winding-up of a company, where the liabilities exposed the assets.

Nihal Sri Ameresekere

he Land had vested with the Government in July 1999, and HDL’s only asset was its building valued at around Rs. 5,000 m to Rs. 6,000 m, whereas the debts claimed from HDL by the Government is well over Rs. 12,000 m Ameresekere has asserted that these are public funds.
Legal circles opined that as per the new Companies Act the definition of Director could include the Secretary to the Treasury, as well as the Competent Authority as persons according to whose directions and instructions the Board of Directors act.

1. The following are excerpts from Objections filed by Ameresekere seeking relieves as prayed for:

2. These Objections, as per direction of Your Honour’s Court, are to the two Motions submitted on 15.3.2012 by the Senior State Counsel.

3. The said two Motions do not constitute and cannot be recognised, as lawful applications made to obtain an Order from Your Honour’s Court and therefore ought be rejected in-limine.

4. The said two Motions have suppressed pertinent facts and transgressions stated herein, since the commencement of these Winding-up Proceedings on 17.11.2006.

5. A lawful application has to be by Petition, supported by an Affidavit, in seeking an Order from Your Honour’s Court.