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Pramuka liquidation stayed by Court

The Court of Appeal yesterday issued a stay order against the Central Bank restraining it from liquidating the Pramuka Bank.The order by the President of the Court of Appeal Justice Nihal Jayasinghe was sequal to four petitions against the Central Bank decision to cancel Pramuka's licence.

The petitioners numbering 234 described to Court the various steps that the Central Bank's Monetary Board, Governor A. S. Jayawardane, Deputy Governor Nagahawatte and Bank Supervision Director Mrs. Sirisena (1st to 4th Respondents) should have taken in good faith ,when since 1999, they knew of irregularities in the Pramuka Bank.

The Court was informed that despite the sweeping powers to regulate the banking sector the Central Bank hid certain information and misrepresented to the public that Pramuka was one of the 'safe' institutions to invest in due to its (Central Bank's) supervision.

The petitioners argued, that the Central Bank was acting in bad faith, to cover up its own failures without having regard for the plight of the poor depositors. Therefore, they requested Court to call for the Bank Development files and other Central Bank files relating to Pramuka Bank to examine what underhand dealing had taken place, which the CB is trying to cover up.

In delivering the order the judge also requested the State to try and look at the matter from the point of view of the many thousands of poor and helpless depositors who are in serious difficulty.

The lawyers for the Central Bank eventually gave an undertaking to the Court that they would not take any steps whatsoever to liquidate the bank , till the 24th of February.

The Central Bank was directed to file objections by 31st January and required it to make its Bank Development file and other documents relating to Pramuka available to Court on 21st February 2003.

Among the petitioners are the Gampaha Buddhist Society, which claims it is unable to do its charity works due to the controversial actions of the Central Bank.

Justice K. Sripavan was the other judge.

Three of the petitioners were supported by M. A. Sumanthiran with Prasansani Bandaranayake, R. Balasuriya and S. Sennayake while the fourth one was supported by Viran Corea.Senior State Counsel Nihal Jayawardene with State Counsel A. Obesekara appeared for the Central Bank. 

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