Lankaputhra: Supreme Court issues interim order on GM’S post

In the wake of the removal of the Lankaputhra Bank Chairman Lasantha Goonewardena on Monday, the Supreme Court two days later issued an order temporarily barring the appointment of a

No new licences for the establishment of finance companies will be issued by the Central Bank (CB) and therefore “licences of existing companies will have a high market value in the future which is a key factor encouraging new investors”, according to the CB on Friday.

It said a major overhaul of the regulatory framework to strengthen the safety and soundness of the sector as a whole is also an essential component of an ongoing process.

The CB said it was issuing a media statement owing to “certain erroneous news items published in few newspapers” raising concerns over financial problems confronted by a few licensed finance companies.

While the CB was able to resurrect a number of troubled finance companies successfully, few other companies still continue in the process of resurrection at various stages since the recovery of some large bad loans given by these companies in the past is delayed due to legal complexities and non-cooperation of those borrowers.

It said these companies are under specific supervision of the CB to restructure their businesses under prevailing laws. Problems of these companies are not new as these have been revealed to the general public since mid-2008.

“The Central Bank has attached highest priority to resurrection of new General Manager.

This came when the Fundamental Rights application filed by the bank’s former General Manager Lasantha Amarasekara was taken up for hearing. Mr. Amarasekara says he was illegally and unlawfully removed by Mr. Goonewardena,

On Tuesday, a group seen loyal to the former chairman launched a protest outside the bank but called it off by midnight. Mr. Goonawardene had come to the office and gone to his room on Tuesday, in defiance of the board decision, but has not been seen since then in the office.

The former bank GM in his application had sought an order for him to be reinstated. After directing that the GM’s post should not be filled, the court fixed the next hearing in the case for November.