Asset Probe

Mar 07, 2010 (LBO) – Sri Lanka’s Supreme Court has ordered a probe on the purchase of a Ceylinco group firm by the chairman of Merchant Bank of Sri Lanka, a state-run bank, in the course of a court case relating to a failed financial firm, a media report said. Supreme Court Justice Shirani Tilakawardene has order the Central Bank to submit a report on the share transfer to the personal account of MBSL chief Janaka Ramtnayake, The Sunday Times newspaper reported.

Judge Tilakawardene had read out a letter in court which complained of a transfer of 500,000 shares of a Ceylinco group company though there was a court order against the sale of Ceylinco assets, the report said.

She has ordered the Central Bank of Sri Lanka to submit a report on the deal, the newspaper said.

Information filed by the The Merchant Bank of Sri Lanka last year said it had purchased 46.35 percent of shares in Ceylinco Investment Company Ltd, and its chairman Ratnayake had also purchased a similar stake.

The Ceylinco group ran into a liquidity crisis in late 2008 after Golden Key, an unregulated group company collapsed. Investors in several Ceylinco firms filed public interest petitions in court demanding their money back. The Supreme Court hearing related to Ceyl