Legal Cover

Sept 20, 2010 (LBO) – Corporate lawsuits are on the rise in Sri Lanka with the collapse of financial firms and a new company law making directors and executives more accountable, an insurance industry official said. Not only globally but in Sri Lanka too the trend of claims filed against corporate executives exposing them to potential personal liabilities for violations of laws and regulations has shown a marked increase,” said Ravi Liyanage, General Manager Sales and Marketing at Janashakthi Insurance.

This was especially after the collapse of some major financial institutions recently.

“Some well known business leaders and top corporate executives have lost virtually everything they had earned during their life time,” he said.

“Government regulatory bodies, depositors, shareholders and investors, employees, and consumer groups are more aggressively asserting their perceived rights to influence corporate decisions and business strategies.”

Several Sri Lankan finance companies ran into trouble following the collapse of an unlisted finance firm in the unlisted Ceylinco group whose top executives were subsequently arrested and bailed on fraud charges.

Business leaders are confronted with