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By CSE Leaks Professor
Left: M.R. Shah, while A.P.Gaminii Karunathilake opening the
City Branch of MBSL in September 2010 with M.R. Shah.
According to exclusive internal sources from Merchant Bank of Sri Lanka (MBSL), its present Chairman M.R. Shah is under many deals with regards to Ceylinco companies that he is managing under island nation’s Merchant Bank house, a subsidiary of Bankers to The Nation; Bank of Ceylon.
“M.R. Shah is secretly trying to liquidate the Standard Credit Lanka Limited former Ceylinco Investments & Realty Limited” a concerned depositor recently revealed in a letter to CSE Leaks.
However, when CSE Leaks tried to contact M.R. Shah he was not available for comments whilst no return calls were received when tried to contact Sanka Wijesinghe’s mobile who earlier headed Ceylinco Investments & Realty Limited under Ceylinco umbrella.
Back in August 2010, Ceylinco Investments & Realty was retiled as Standard Credit Lanka Limited under the supervision of its managing agent Merchant Bank of Sri Lanka (MBSL). That time Shah had said that company is not accepting any public deposits while it was spending nearly Rs.30 million per month to pay arrears and interests of customers. Shah had said company will start to accept public deposits soon and it had retained customer confidence among its 3800 depositors.
M.R. Shah had also said that the company has a five-year master plan to continue the pawning business opening its official pawning business centre at Union Place, Colombo.
Meanwhile reports reveal that Standard Credit Lanka Limited is close to finalising an Rs.100 million private placement deal with a new investor, Entrust Limited to convert 68% of their deposits into shares.
Entrust Limited now headed by a different board of directors is another former Ceylinco subsidiary, Ceylinco Shriram Securities Holdings which retiled under ‘Entrust’ brand in the wake of Golden Key financial fiasco. However, following this capital restructuring exercise, Entrust would have the controlling stake amounting to over 51% of Standard Credit Lanka Limited . As per reports Entrust will come in to rescue to meet a Rs.648 million deposit liability of Standard Credit Lanka Limited.
Former Ceylinco Investments & Realty Limited now known as Standard Credit Lanka Limited will go for an Initial Public Offering (IPO) next year under the directives issued by the Monetary Board after this private placement deal with Entrust according to sources.
Sri Lanka’s former corporate whistleblower, the active Unionist M.R. Shah who was once the President Ceylon Bank Employee's Union (CBEU) today heads one of Sri Lanka’s top state owned investment banking subsidiary MBSL and manage fallen entities of Ceylinco such as The Finance PLC (TFC), The Finance & Guarantee Co. Ltd. (F&G), Ceylinco Building Society, Ceylinco Sussex School Network, Ceylinco Savings Bank (Now MBSL Savings Bank) and Ceylinco Investments & Realty Ltd. which is now Standard Credit Lanka Limited.
Ultimately, M.R. Shah is today sitting on boards which were once led by Lalith Kotelawala; who once slammed M.R. Shah by seeking damages of Rs.1 billion through filling a case against the M.R. Shah and his union and the union General Secretary for defamation back in November 2008.At the time it was said that in September 2008, Court issued an Enjoining Order restraining the CBEU, Shah and CBEU General Secretary from publishing and/or issuing and/or circulating any statement derogatory and/or defamatory of Kotelawala, while Shah had written to Seylan Bank PLC General Manager/CEO with a copy to the Labour Commissioner General containing statements derogatory and/or defamatory of Kotelawala while the enjoining order was in force.
Ceylinco Group Chairman Deshamanya Dr. Lalith Kotelawala on Tuesday filed a petition in the Colombo District Court against President M.R.Shah for alleged Contempt of Court.
The incident turned out when Whistle Blowing M.R. Shah’s Ceylon Bank Employees Union (CBEU) filed action against Seylan Bank PLC and its Founder Chairman Deshamanya Dr. Lalith Kotelawala in the Colombo District Court and obtained two enjoining orders against Seylan Bank and Kotelawala, refraining them from preventing Seylan Bank employees joining the CBEU and from interfering with its activities.
However, later both Seylan Bank and Kotelawala filed two Leave to Appeal applications with the Colombo High Court against the said enjoining orders. The High Court having heard the submissions made by Counsels for Seylan Bank and Kotelawala, and being satisfied that the CBEU had allegedly misrepresented facts to Court in obtaining the enjoining orders and that the CBEU has not presented a prima facie case, issued an interim order suspending the said enjoining orders. Further, High Court also granted Leave to Appeal to Seylan Bank and. Kotelawala at the time.
M.R. Shah Vs. A.P.Gamini Karunathilake
After assuming duties as Chairman of Merchant Bank of Sri Lanka PLC in June, 2010, later in December 2010, former whistle blower M.R. Shah suspended MBSL’s long standing Chief Executive Officer (CEO) and reputed banker, A.P.Gamini Karunathilake while internal sources from the bank said it was a personal grudge that may have led to the suspension of CEO by M.R.Shah who directed and internal investigation.
“Frankly to tell you, he has only taken one extra salary and kept the one of company owned cars at home” said a source from MBSL to CSE Leaks revealing about the background of A.P.G. Karunathilake’s suspension.
Banking sources say that State Merchant Bank is much indebted to Karunathilake who had brought about a steady growth after taking over the administration from Sunil Wijesinghe in 2005 who ran a dud porcelain company, Dankotuwa Porcelain (DPL) until Sri Lanka’s trail blazer company Environmental Resources Investment PLC (GREG) came into rescue of Wijesinghe’s porcelain entity. A.P.Gamini Karunathilake is said to have hurdled major operations that lifted the MBSL from a crisis to a sound position.
However, on 3 January 2011, Merchant Bank of Sri Lanka (MBSL) Chief Executive Officer Gamini Karunathilake got an enjoining order from the District Court of Colombo against his suspension beating former whistleblower M.R. Shah’s so called ‘baseless’ misconduct allegations that were un-described.
Karunatillake is a professional banker with over 30 years of experience. He obtained a B.Com (Hon) Degree from the University of Sri Jayewardenepura and an MBA from the Post Graduate Institute of Management (PIM) of Sri Lanka. He is a fellow member of the Institute of Bankers of Sri Lanka and was a visiting lecturer on ‘Law and Practice of Banking’ for the Bachelor of Commerce and Economics Degree programmes and on ‘Banking and Finance’ for the MSc. Management Programme at the University of Sri Jayewardenepura. He also served as a lecturer and Chief Examiner on ‘Law and Practice of Banking’ and ‘Practice of Banking’ at the Institute of Bankers of Sri Lanka. He was also a Director of Merchant Credit of Sri Lanka Ltd.
http://www.cseleaks.com/2011/02/mbsl-mr-shah-revealed-will-he-secretly.html
