Restraining order obtained to cancel NDB EGM

Adding a new twist to the saga surrounding the removal of the NDB Bank Chairman, it appears that a restraining order obtained by NDB Bank Shareholder Dr. Sena Yaddehige may have contributed to the cancellation of the Extraordinary General Meeting (EGM) to appoint a new Chairman.
Dr. Yaddehige had sought relief from the Commercial High Court (CHC) to stop the resolution to be tabled at the EGM to change the bank’s Articles of Association Article 49, which only allows an Independent Director to become the Chairman of the Bank and Article 36 (iii) which defines an Independent Director.
The EGM was to be held on July 27, but last week the CHC Judge Shiran Gooneratne had ruled to grant a restraining order against the resolution.
Dr. Yaddehige is the 3rd largest shareholder in the bank, owning 5.26 percent of the shares.
His legal team had argued that the NDB Bank in the past had voluntarily complied with the Articles by appointing an Independent Director as a Chairman, and changing that now would lower standards with respect to the Best Practices Code of Corporate Governance.
 They had also quoted from a past statement of Public Enterprise Development Deputy Minister Eran Wickramaratne, who was also a Former CEO of NDB Bank.
“Some private banks such as the National Development Bank follow even stricter criteria requiring the Chairman of the board to be an Independent Director as well,” he had said.
Dr. Yaddehige was represented by President’s Counsel Dr. Harsha Cabral and Attorneys-at-Law Kushan Illangatilake, Nishan Premathiratne and Mahela Liyanage, who added that NDB Bank had not made an application to vacate the restraining order.
On Monday, NDB Bank CEO/Director Rajendra Theagarajah had informed the Colombo Stock Exchange that the EGM was cancelled since key shareholders were opting to vote against the resolution.
Former Hayleys Chairman N. G. (Tanky) Wickremeratne currently sits as the Chairman of NDB Bank.
Softlogic Group’s Ashok Pathirage, who owns 6.66 percent of NDB Bank shares both directly and through the Softlogic Group is the Deputy Chairman of the bank and the 2nd largest shareholder.
The state is the largest shareholder, owning 33.47 percent of the shares through state enterprises and public funds.