Not Funny

Depositors and creditors of the failed Pramuka Bank sought legal action on Tue demanding Rs. 6 bn as damages from the regulator, the auditors and directors. Depositors and creditors of the failed Pramuka Bank sought legal action on Tue demanding Rs. 6 bn as damages from the regulator, the auditors and directors. The District Court of Colombo allowed the application to proceed and the case will be taken up on Friday April 1.

Legal action stems from alleged inaction and subsequent wrongful action by Sri Lanka’s Central Bank, auditors KPMG Ford Rhodes, Thornton & Co. and Pramuka’s directors including its ex-Chairman Rohan Perera.

Pramuka Bank collapsed in 2002 under a mountain of bad loans, but its liquidation was held up after depositors went to Court demanding that the Central Bank consider all options before winding it up

However, on Aug. 3, the Central Bank moved to liquidate Pramuka after nearly two years of scouting for potential investors to revive the failed bank.

The depositors allege that Central Bank did not follow proper procedures, which included consulting K C Vignarajah (a representative of the depositors), before opting for l