Sep 10, 2020 (LBO) – Indocean Developers has informed buyers of Altair apartments that a recent Supreme Court decision relating to a management rights dispute involving two groups of shareholders was only a denial of a plea by one party to the dispute to dismiss a case filed by two purported directors on the grounds that the said directors had been fraudulently appointed.
At the point of reaching its decision, the Supreme Court of Sri Lanka did not have the benefit of a sweeping order issued by the National Company Law Appellate Tribunal (NCLAT) in New Delhi, the highest commercial court in India, on Friday, 4th September 2020, staying the appointment of three directors, Messrs Pradeep Sureka, Jugal Khetawat and Rajendra Bachhawat, and reinstating as a director the petitioner Jaideep Halwasiya, the Company explained.
In making the order, the three-judge bench of the Indian Court took cognizance of several matters including the fact that the director removed despite being one of its shareholders and directors, had not been served with notice and therefore was not presented at a purported AGM held on 24th September 2019 at which the directors whose appointments were challenged in the petition, were purportedly appointed to the Board of Directors.
The Court observed that no resolution or minutes were presented to suggest that two directors of the company in question decided to hold the said AGM and no notice or agenda had been circulated in the prescribed manner in respect of the same. The Court also noted that the Annual Report of the Company falsely declared that the said AGM had been attended by Mr Halwasiya and also by another director Mr Man Mohan Bagree who by his own subsequent admission was in Sri Lanka at the material time.
“This important judgement of the NCLAT will be submitted to the Courts in Sri Lanka, which will, no doubt, take due cognisance of the same,” Indocean Developers told buyers in a communiqué.
“In the meanwhile, we are under the auspices of the Office of the Special Authorised Officer working tirelessly and with good result, to deliver on our pledge to H.E. the President and to Altair buyers that handover of apartments will commence in January 2021, and equally important, you will receive a qualitatively uncompromised product,” the communiqué said.
Indocean Developers has also alleged that the South City Group, one of the parties to the management rights dispute, has perpetrated massive fraud, an unexplained cost overrun of over US$ 130 million, as established by investigative reports from two of the top four international accounting firms, and a project delay of over two years.