The Colombo District Court ordered written submissions to be filed by the insurance company and its companies that have been proposed to be segregated, and by the shareholder who earlier petitioned the court alleging that the Insurance company had not acted in accordance to the Companies Act when segregating the business.
When the matter was taken up at the Colombo District Court on Thursday, Palitha Kumarasinghe PC, Counsel who appeared on behalf of the company objected to the Petition filed by the shareholder.
The shareholder filed a Petition on October 17th, stating the Insurance company had not acted under the law when it obtained approval for the segregation of the life and general divisions of the company.
The Petition also said that despite undertakings by its Chairman, the company failed to inform the shareholders about the mechanism of the segregation The Insurance Industry Act states that all Insurance Companies must segregate its Life and General divisions.
However, the petitioner stated that all other insurance Companies in the country, which abided by the Act had first informed and sought the consent of the Shareholders of the respective companies prior to the segregation.
Earlier another shareholder of the company filed legal action in the Commercial High Court of Colombo and received an interim injunction preventing transfer of assets of certain ‘funds’ of the same company. However the interim injunction was thereafter removed. Harsha Fernando appeared on behalf of the party seeking to intervene in order to prevent the said company from transferring its assets without the approval of shareholders of the company. The issue with regard to the insurance company came to limelight during the Golden Key case when parties alleged that the shareholding of the company was vicariously held by a shamed business tycoon.
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