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Sri Lanka’S NDB aborts move to scrap independent chairman

ECONOMYNEXT – Sri Lanka’s NDB Bank Plc has rolled back an attempt to scrap its mandatory requirement for an independent non-executive chairman, which earlier shareholders had put in place in a bid to maintain a superior governance standards.

NDB had called an extraordinary general meeting (EGM) on July 27, to get shareholder approval to scrap the requirement for an independent chairman.

"However as several major shareholders have intimated their intention to vote against the proposed resolution, the Board is of the opinion that the bank would fail to obtain the requisite approval of the shareholders…" NDB Chief Executive Rajendran Theagarajah said in a stock exchange filing.

Sri Lanka central bank rules also say the chairman should be ‘preferably’ be an independent director.

NDB is the only listed bank with a mandatory requirement to have an independent director.

Sri Lanka’s government is a key shareholders of the bank.

"A few years ago there was an attempt to remove this requirement for the chairman to be an independent director, but it was opposed by the then government," Deputy State Enterprise Minister Eran Wickremaratne said in an interview with Sri Lanka Daily FT newspaper.

"The present government would go further an advocate that such a high level of criteria be adopted by other banks as well and also be included in the Directions issued by the regulator."

 

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