By Stanley Samarasinghe
Presidential advisor Vasudeva Nanayakkara yesterday filed an application in the Court of Appeal to prevent individual shareholders or corporate shareholders holding shares in excess of Commercial Bank.
Court informed the petitioner to give notice to the respondents and support the case on October 2nd 2007.

The bench comprised K. Siripavan, President of Appeal Court and Justice Rohini Perera.

Nivard Cabral, Governor Central Bank, D. H. S. Jayawardana Commercial Bank of Ceylon Monetary Board, Central Bank, DFCC Bank, Sri Lanka Insurance Corporation Ltd., Distillers Company of Sri Lanka Ltd., Hatton National and Lanka Milk Food (CWE) Ltd., were cited as respondents by this application.

The petitioner, an Attorney-at-law, Secretary of the Democratic Left Front, Advisor to President Rajapaksa, the Colombo Municipal Council and Opposition Leader, filed this application in the public interest to prevent holding of shares in excess of the percentage laid down by law.
According to the Annual Report of the Commercial Bank 2006, the authorized share capital of the bank is Rs. 5,000,000,000/- while the issued share capital is Rs. 2,428,18600/- which includes voting, non voting and preference shares.

The share holders entitled to vote, hold 133,518,264 shares.
The petitioner states that the Monetary Board of Central Bank of Sri Lanka issued a directive dated 19th January 2007, under the Banking Act. No. 1 of 2007 laying down the limit for share holders holding shares in Commercial Banks, acquired or held, 10% without prior approval, or 15% with prior approval.

The petitioner states that share holders holding large number of shares of Commercial Banks ,exercise undue influence over the management of such banks. This resulted in adverse effects on their existence, and created a situation which could cause financial instability, resulting in prejudice to the interests of other share holders, depositors and members of public. The second respondent D. H. S. Jayawardana, through his related companies has an indirect share holding of 41.65% in the Commercial Bank.

Petitioner prays the court to issue a writ of mandamus directing the monetary board of the Central Bank to issue a directive to the 2nd respondent D. H. S. Jayawardana and his related companies to dispose of, or reduce material interest in Commercial Banks to an aggregate of 10% in terms of the Banking Act.

Mrs. Faiz Marikkar Musthapa appeared with Rukmal Somawansa instructed by K. Kodagoda, for the petititoner.