MTD Walkers PLC restrained from transferring shares

Colombo (News 1st): The Colombo Commercial High Court has issued enjoining orders on MTD Walkers PLC restraining it from transferring its shares in the name of third parties until February 20. High Court Judge R. Gurusinghe issued four enjoining orders on MTD Walkers PLC in cases filed by four private banks. The four plaintiff banks by their petitions had claimed that MTD Walkers owed them money, taken as loans and had not been settled with interest to this date. The banks further claim that MTD Walkers is attempting to transfer shares in the name of third parties and the banks' plea to court was to issue permanent injunctions on the defendant company after hearing the case.

What happened?

MTD Walkers PLC joins a long list of early warnings given to the authorities and the people by team News 1st. These included

• The Central Bank Bond Scam
• The Central Expressway
• The procurement of coal
• The Tyre Factory
• Departure from due process in various national procurement matters
• Formation of a national government
• Attempts to suppress the media via the 19th amendment and so on

MTD Walkers had on its board, businessman Jehan Amarathunga as its Deputy Executive Chairman. Mr Amarathunga was also a member of the main board of the People's bank and held several prominent positions within that group. The People's Bank had extended various facilities which at some point reached a staggering Rs. 10 billion. The MTD Walkers annual report revealed a staggering Rs. 18 billion worth of facilities from local banks. Team News 1st raised the spectre of conflict of interest situation in which a serving director of a state bank was able to oversee the granting of facilities to a listed entity in which he was a prime decision maker. Unfortunately for shareholders of these financial institutions that lent the money in good faith to these companies including the state, the People's Bank chose to ignore the early warning sounded by team News 1st and instead justified the facilities and the lending and issued a press release to the effect that all lending was done considering the scope of the company's business. As is revealed now, those at the People's Bank who are responsible for evaluating the facilities granted have clearly overestimated the company's potential and the public money is once again at grave risk.

So what will happen next?

The Commercial High Court has issued a temporary restraining order blocking the sale or transfer of shares in MTD Walkers PLC and its subsidiaries. Although four banks have gone to court, several other banks are likely to pursue MTD Walkers for their share of the monies owed. Significant changes are likely in the offing especially to protect the employees of the company and to ensure that all statutory dues including EPF and ETF have been paid and will be paid.

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