Sri Lanka’s biggest listed insurer accused of assaulting shareholders

EconomyNext – A big shareholder of Ceylinco Insurance, Sri Lanka’s biggest insurer, complained of assault and intimidation by company workers at a meeting of shareholders called to discuss segregation of its life and general insurance business.

One of the shareholders was injured in the assault and hospitalised Tuesday, said Sanjaya Samararatne, Group Chief Financial Officer of Global Rubber Industries (GRI), which has 22.86 percent of the voting rights of Ceylinco Insurance.

Shareholders were merely seeking information about the proposed segregation of Ceylinco Insurance’s general and life insurance businesses as required by the regulator, Insurance Board of Sri Lanka, he told a news conference.
 
"When shareholders asked questions about the segregation, they were surrounded, intimidated, scolded in filth and assaulted, and forced to leave," he said, showing video footage of the assault. 

They had asked the Colombo Stock Exchange, the Securities and Exchange Commission and Insurance Board to investigate the matter and protect shareholder rights.

GRI already has filed two cases against the management of Ceylinco Insurance.

One is over its decision to transfer all its insurance business to two separate subsidiaries without shareholder approval and the other accusing Ceylinco Insurance directors of siphoning out funds and asking court to order a forensic audit of its accounts.

Global Rubber Industries, the second largest shareholder of Ceylinco Insurance, is a manufacturer and exporters of solid tyres, and bought the stake in Ceylinco Insurance almost four years ago.

Samararatne said shareholders were trying to exercise their lawful rights of asking questions about the management decisions of the company.

"Would any shareholder want to invest in the stock market if he or she cannot go to a meeting of a listed company and be peacefully heard?" he asked.

"Is this the appropriate behaviour of the largest insurance company in the country?"

Ceylinco Insurance management had tried to use a court order to say they don’t need shareholder approval to segregate the business.

"All other insurance companies have gone to their shareholders and got shareholder approval to segregate their insurance business," Samararatne said.

"The court proceedings clearly state the application of Ceylinco Insurance is only in respect of consequential matters and not the segregation," he said.

"Why would the company wan to hide behind court orders instead of giving shareholders information on the segregation?"

"It is very disturbing that Ceylinco Insurance, being the largest insurer, is seemingly trying to find all the ways possible to not go before their shareholders on the segregation," Samararatne said.

Ceylinco Insurance had now disrupted two meetings with shareholders seeking information about the new business model.