Mahendra to resign from Com Bank today
* Amitha to resign from MD post before April, Ravi Dias to takeoverDecember 29, 2011, 12:00 pm
Commercial Bank of Ceylon PLC announced that its Chairman Mahendra Amarasuriya would resign from the office of Chairman and as a member of the Board of Directors today, December 30.
The bank said in a stock exchange filing yesterday (29) the resignation was for personal reasons, "notwithstanding the Appeal Court Interim order making it legally possible for him to continue as a Director of Commercial Bank beyond December 31, 2011.
The Central Bank has a ruling that required those who had served nine consecutive years on commercial bank boards as well as those over 70 years of age to step down as part of good corporate governance.
However, good governance activist K. C. Vignarajah, who obtained an interim injunction from the Court of Appeal deferring the Central Bank retirement ruling, says Amarasuriya’s resignation on personal grounds would have to be accepted, despite it being a sad day for the bank and the country’s banking sector.
"Age and experience should not be a disqualification in the highly competitive banking sector. Amarasuriya was fit, honest and upright and his integrity was unimpeachable. He possessed a wealth of knowledge and experience and he was highly respected," Vignarajah said speaking to The Island Financial Review.
Vignarajah said he had challenged the Central Bank ruling because he was trying to defend good principles.
"We would rather see someone with integrity sit on the board rather than a political appointee. And just because someone is above the retirement age does not render such a person redundant. Being efficient in a policy making capacity, such as a non-executive chairman or director of a commercial bank board, does not mean a person has to work 24x7. At the policy level, the skills required are different from hands-on management and this is why banks need people with knowledge and experience. We must not ignore the fact that there is a dearth of good, upright people with integrity for these top level positions," he said.
Vignarajah said his legal action countering the Central Bank’s ruling was not solely intended to allow Amarasuriya to continue as the Chairman of Commercial Bank, but also to allow other such persons a chance to continue serving in their respective director boards for the good of the banking industry.
Amarasuriya served as Commercial Bank’s Chairman for 16 years.
Meanwhile, highly placed industry sources told The Island Financial Review that Amitha Gooneratne, the bank’s Managing Director was expected to resign before April 2012. It is believed that the bank’s Chief Operating Officer (COO) Ravi Dias would be appointed as the new Managing Director.
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