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SL Insurance sale annulled, shares revested in Treasury

* SC commends petitioners
* Govt. Valuer kept in the dark
* New directors to be appointed
* Tender Board had no jurisdiction
* Deal struck under UNF govt.

The Supreme Court yesterday declared in judgement that the sale of 90 per cent shares held by the Secretary to the Treasury on behalf of the government, in the Sri Lanka Insurance Corporation, had been carried out wrongfully. The Court declared the aforesaid sale to a private owner null and void and ordered that the shares sold in that transaction be immediately re-vested in the Secretary to the Treasury.

The respondents, Milford Holding Pvt. Limited and Greenfield Pacific EM Holdings Ltd., would have to return to the Treasury the 90 per cent shares they purchased subsequent to an agreement dated April 11, 2003.

The aforesaid companies will be entitled to their investment amounting to Rs. 6.5 billion.

The Court ordered that the Secretary to the Treasury nominate new Directors to the Sri Lanka Insurance Corporation.

The petitioners, Vasudeva Nanayakkara, and a group of employees of the SLIC had complained that the privatisation of 90 per cent shares was done mala-fide. The petitioners had filed a public interest litigation, in the interest of the citizens of the country. They sought to nullify the agreement dated, April 11, 2003.

The Greenfield Pacific Holdings Limited is the local agent of Milford Holdings Pvt. Limited of Singapore. Harry Jayewardene had been a signatory for the purchases, at the agreement to purchase 90 per cent of the SLIC shares in April 11, 2003.

The Court declared that the petitioners had been subjected to arbitrary treatment by this deal.

The Court said that the steering committee to structure the sale appointed without Cabinet approval. Although Minister Moragoda said that it was only advisory in function, the committee had carried out administrative and executive action. The Tender Board had been appointed without following Cabinet directions and had no jurisdiction.

The government Valuer did not value the privatisation project. The steering committee had kept the government valuer out of the scene. The petitions were supported by M. A. Sumanthiran and Viran Corea.

The Court commended the petitioners for litigating in the interest of the public and getting re-vested in the State a pivotal public institute. The Court said such services are priceless and could not be limited to an ordered cost. As a token of appreciation they were granted a copy each of the judgement free of cost.

The judgement was by Justice N. G. Amaratunga with Chief Justice Sarath N. Silva and Justice K. Sripavan.

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