Company Is a ‘Person’: Supreme Court Clears Path to Prosecute PTL, Ravi K, Mahendran & Co, in 2016 Bond Scam

COLOMBO (News1st); Sri Lanka’s Supreme Court overturned an earlier order that blocked the continuation of charges against Perpetual Treasuries Ltd and several others under the Public Property Act, in connection with the controversial Central Bank bond issue of March 2016.

In its new ruling, the Supreme Court set aside a directive by the Colombo High Court Trial-at-Bar, which had earlier held that charges under the Public Property Act could not be maintained against the accused. As a result, the Court has now made clear that there is no legal barrier to continuing with those charges against Perpetual Treasuries and the other accused named in the case.

The decision was delivered by Supreme Court Judge Mahinda Samayawardhena, with the agreement of Chief Justice Preethi Padman Surasena, and Justices Shiran Gooneratne, Achala Wengappuli and Arjuna Obeyesekere, after hearing an appeal filed by the Attorney General. The appeal challenged the earlier High Court order that had effectively halted the Public Property Act case.

The original indictment was filed before a Colombo High Court Trial-at-Bar over the Central Bank bond auction of 31 March 2016. The Attorney General named Perpetual Treasuries Ltd, former Finance Minister Ravi Karunanayake, former Central Bank Governor Arjuna Mahendran, Perpetual Treasuries directors Arjun Aloysius and Geoffrey Aloysius, and several others – ten accused in total – alleging unlawful use of government funds during the bond issuance.

When the trial commenced in 2021, defence counsel raised a preliminary objection, arguing that Perpetual Treasuries, as a company, could not be charged under the Public Property Act. On that basis, they contended that the case could not proceed not only against the company but also against the other accused. Accepting these arguments, the Trial-at-Bar on 6 December 2021 upheld the preliminary objection and blocked the continuation of the Public Property Act charges.

The Attorney General then appealed to the Court of Appeal against that decision. The Court of Appeal rejected the appeal, after which the Attorney General again appealed, this time to the Supreme Court.

In its judgment on that appeal, the Supreme Court has now ruled that there is no legal obstacle to maintaining charges under section 5(1) of the Public Property Act, read together with section 386 of the Penal Code, against the accused in this case. The Court held that, under the Interpretation Ordinance, a company must be treated as a “person” for legal purposes, meaning a company too can be charged under the Public Property Act.

The judgment further notes that large, secretive and complex financial frauds, carried out not only by individuals but also through institutional structures, can inflict serious losses on public property.

Accordingly, the Supreme Court has directed that, under section 450(5)(a) of the Code of Criminal Procedure, the Colombo High Court Trial-at-Bar should now proceed with the trial without delay and conduct the hearings as expeditiously as possible.