Feb 24, 2008 (LBO) – Sri Lanka’s DFCC Bank has taken the Central Bank to court in a legal challenge on restrictions on its ownership of another bank in which it is a big shareholder, a newspaper reported. DFCC is resisting a ruling by the Central Bank Monetary Board seeking to reduce its shareholding in Commercial Bank to 15 percent by October this year, the Sunday Island reported.
“Court has ordered notice to be issued on the Monetary Board and this action is pending,” the newspaper quoted DFCC as saying in an interim statement incorporating its nine month results to Dec. 31, 2007.
DFCC has slightly over 29 percent of the Commercial Bank, with this shareholding rising to 42.6 percent when aggregated with those of other connected parties, the paper said.
Legal actions have also been filed against DFCC by several parties seeking the reduction of DFCC’s shareholding in Commercial Bank, together with that of several other connected shareholders, to an aggregate not exceeding 10 percent, the paper said.
The parties to these actions include the Ceylon Bank Employees Union, members of Commercial Bank’s Executive Officers Association as well as opposition leftist politician Vasudeva N