Restraining order on three businessmen from functioning as directors

All Board members barring CEO agree to sell luxury hotel for US$ 4.5 m

The Commercial High Court of Colombo restrained Don Gamini Chandrathilake Netthicumara, Wasantha Kumara Galagoda and Nipuna Devindra Samarawickrama from acting as directors of Serene Pavilions (Private) Limited with immediate effect, in a case filed by one of the directors Sumith Guruge against the illegal manner in which the management of the company was being conducted.

The court order follows a boardroom battle between a British media moghul and investor and the Chairman of the multi-million rupee boutique hotel at Wadduwa, Clive W. Leach and some directors and Deputy Chairman and CEO, Anura Lokuhetty (Sunday Times page 8 last week).

Mr. Guruge claims that the respondents had arbitrarily conducted a meeting not in keeping with the rules of the company and that thuggery was used to prevent him from conducting a meeting of the directors.

The Commercial High of Colombo Justice M.C.B.S Morais after listening to the submission by Counsel for Mr. Guruge granted interim relief restraining Messrs. Netticumara, Galagoda and Samarawickrama from functioning as directors with immediate effect.

There are 13 respondents in the case including Serene Pavilions (Private ) Limited, Anura Lokuhetty, Jit Warnakulasuriya, Dilani Lokuhetty, Clive William Leach, Stephanie Leach, Business Management House (private) Limited, Don Gamini Chandratillake Netthicumara, Wasantha Kumara Galagoda, Nipuna Devindra Samarawickrama, Chart Business System (Private ) Limited, Dilith Jayaweera and Gazali Hussain.

The petitioner states that the issued share capital of Serene Pavilions (Private) Limited company’s shares have been allocated in the following manner; Clive William Leach (37.78 per cent) Anura Lokuhetty (30.12 per cent), Sumith Guruge (15 per cent) Dishan Jitendakumar Warnakulasur- iya (12.1 per cent) and Gautama Radia (5 per cent). The petitioners states that acting in terms of the provisions of the articles of association of the 1st respondent the existing Directors namely Clive William Leach and Stephanie Leach respectively appointed Dilith Jayaweera and Gazali Hussain to be their alternative directors.

In or around January 11, 2013 all board members other than Anura Lokuhetty, agreed to proceed with a decision to sell Serene Pavilions (Private) Limited. The decision to sell the Company was positively responded to by Mr.Iqbal Daredia, an investor with an expression of interest to purchase 100 per cent of the equity at a substantial indicative price of US $ 4.5 million.

The petitioner states that the Secretaries of Serene Pavilions (Private) Limited had received a Board resolution instructing the same by South West Holdings (Pvt) Limited which was controlled by the 2nd respondent Lokuhetty seeking to re-issue share certificates to South West holdings (Pvt) Limited comprising 308,550 shares of Serene Pavilions (Private) Limited on the basis that the same was transferred by Clive William Leach with no consideration whatsoever.

The petitioner states that in line with this, Mr. Lokuhetty sought to coerce and exert pressure on the Company Secretaries of Serene Pavilions (Private) Limited viz., Chart Business System (Private) Limited seeking to effect an alteration of the share register.

The petitioner also states that, to the best of the petitioner's knowledge, owing to the pressure inverted by Mr. Lokuhetty and /or any one and/or more of them, an alteration had been affected in the original register which was subsequently reversed upon seeking a legal opinion thus preserving the original share composition.