By Adolf
Hatton National Bank (HNB), Sri Lanka’s second-largest private bank, is now at the center of a corporate governance storm that raises serious questions about the protection of public deposits. Our earlier reporting highlighted the brewing crisis within the bank. In response, some insiders have sent threatening messages claiming we will “see you in court.” We welcome such scrutiny, where the focus should rightly be on how depositors’ money is safeguarded from questionable decisions made in the boardroom.
The latest development is the appointment of a new Chairman whose professional background lies primarily in the tobacco and beer industry. In addition, his role as Chairman of the State-Owned Enterprise (SOE) Restructuring Committee Suresh Shah has drawn criticism, with allegations that nearly Rs. 200 million was spent on consultants without meaningful results. An audit report on this matter is reportedly under investigation by the Bribery Commission . Furthermore, concerns have been raised that relatives connected to him are in arrears to the bank. These issues go beyond a mere mismatch of expertise; they raise serious questions about potential conflicts of interest at the highest level of an institution that depends entirely on public trust.
Employees, shareholders, and depositors have already voiced concerns, warning that such leadership choices could undermine the integrity of the bank. HNB’s greatest asset is the confidence of its depositors. Any perception that this trust may be compromised should trigger immediate alarm.
The bank has also recently witnessed a boardroom coup that exposed deeper governance weaknesses. Three independent directors—who hold no equity stake in HNB—effectively removed the respected lawyer Nihal Fernando, PC, from his role. The abrupt removal of such a seasoned legal professional is unprecedented and raises fundamental questions about accountability. Who benefits when experienced legal oversight is sidelined? More importantly, what safeguards remain to protect depositors from decisions driven by internal power struggles rather than sound banking principles?
Further concerns have emerged from employees, shareholders, and depositors regarding potential conflicts of interest involving the incoming Chairman. HNB is not a private enterprise where personal or related-party interests can override fiduciary responsibilities. It is an institution built on public deposits. Any misalignment at the top directly threatens the confidence of millions of depositors whose savings underpin the bank’s stability.
Despite these troubling developments, the Central Bank—under a Governor who holds regulatory powers greater than many of his predecessors—has remained silent. Public discourse and social media are increasingly filled with warnings, yet regulatory authorities appear reluctant to intervene. Such inaction risks eroding confidence in Sri Lanka’s banking system and sends a dangerous signal that governance failures at major financial institutions can go unchecked.
HNB’s predicament illustrates a broader systemic challenge: when boardroom politics, shareholder interests, and leadership conflicts intersect, it is the ordinary depositor who ultimately bears the risk. The removal of experienced oversight, combined with controversial leadership appointments, suggests a troubling breakdown in governance at the highest levels. A bank is not a private playground; it is an institution entrusted with the hard-earned savings of citizens.
Our reporting will continue to highlight these issues, emphasizing accountability, transparency, and the protection of depositors. If legal proceedings arise, they may provide an appropriate forum to examine these governance concerns in detail. But the larger question remains: how can a bank entrusted with public funds operate effectively when leadership decisions appear to undermine depositor confidence?
The unfolding situation at HNB is a stark reminder that the true strength of a bank lies not merely in profits, but in trust, governance integrity, and vigilant regulation. At HNB, all three are now under scrutiny. The coming weeks will determine whether Sri Lanka’s financial system will uphold its fiduciary responsibilities—or whether public confidence will be weakened by governance failures and internal power struggles.