March 15, Colombo (LNW): Colombo Commercial High Court Judge Priyantha Fernando on March (13) set the order to be issued on April 30, 2024 regarding the case filed by Mr. Sajith Rajapaksa, who was a managing director of the company, challenging the illegal removal from his positions.
The judge also set a date for the investigation regarding the complaint filed by Mr. Sajith Rajapaksa demanding that legal action be taken against contempt of court since defendants ignored the order given by the court to reinstate him in the same positions.
On March 13th at the Colombo Commercial High Court, Mr. Marapana, who appeared for Mr. Sajith Rajapaksa, stated that his client, who held the position of managing director of several companies belonging to the group of companies of DSI, was removed from those positions in violation of the Companies Act and in a manner that is completely contrary to the doctrine of natural justice. President Counsel Naveen Marapana also conveyed to the court that it is completely illegal to arbitrarily remove his client without conducting a proper investigation and appointing others to take over the positions he held while he was arrested on conspired and absurd charges.
The President Counsel told the court that the said removal was done based on the needs and pressure of a very limited number of people and it appears that the removal of a very efficient person like Sajith Rajapaksa was done with the aim of covering up various irregularities and frauds allegedly committed by the respondents.
The companies navigated by Mr. Sajith Rajapaksa and his family had contributed over 60 per cent of net profit of the Group, and the parties chairing other companies, the respondents, had acted in maliciousness to oust him in response to his brilliant performance with the ulterior motive to grab these profitable businesses, he told Court.
It was submitted to the Court that Kasun Rajapaksa, the current Managing Director of DSI Group who is also serving as the Vice Chairman of the Ceylon National Chamber of Industries, and Dilshan Rajapaksa a director of DSI group and also a vice president at National Chamber of Exporters had notoriously opened offshore shoe businesses and committed fraud, paving the way for money outflow, in violation of the parent group’s fiscal regulations and country’s exchange regulations. In the backdrop, the total loss incurred by the Group due to these misappropriations was found to be over Rs. 400 million according to court proceedings.
Sajith Rajapaksa’s lawyers have submitted facts to court elaborating staggering financial misappropriations of Rs. 104 million through Dubai-based Azamaq Novelties Trading LLC, of Rs. 120 million through Australian based Y Communications QLD PTY LTD, of Rs. 60 million through Classic Footwear (Pvt) Ltd and of Rs. 70 million through UK-based Lakeland Footwear International Limited committed by the respondents in the aforementioned manner. The capital invested in the above companies have eroded and become zero while incurring heavy losses amounting to Rs. 81 million as at 31st of March 2022 sparking serious concerns about director’s oversight. Despite the hefty losses these entities have been granted loans by DSI up to a staggering 212 million while trading goods worth Rs 60mn have been continuously supplied by DSI. Why these directors have further burdened these entities by racking up significant international debt also even while performing so poorly remains unanswered. It is also questionable how some of these funds were transferred to the overseas entities during 2021/2022 where there were severe restrictions in place for foreign exchange expatriation. All these raised critical concerns regarding what has happened to the colossal amount of money invested by DSI in the above companies.
Further, facts were submitted to court that the respondents had invested in India via Samson Footwear Private Limited, incurring a loss, and over Rs. 1 billion of corporate guarantees had been retrieved from the parent group via Premier Synthetic Leather Manufacturing (Pvt) Ltd,. The Rajapaksa brothers Kasun and Dilshan duo are the family directors of all these entities.
Regarding the granting of permission to present facts on behalf of Mr. Sajith Rajapaksa, the President’s Counsel who represented the managing director of the respondent company Kasun Rajapaksa, Thusitha Rajapaksa, Bhathiya Amarakon, Nelani Rajapaksa and Asanka Rajapaksa had raised an objection, but the judge rejected the objection on the previous day of the hearing, Mr. Marapana had been given permission.
In the backdrop, the most profit-making businesses managed by Ranatunga Rajapaksa family, in which Sajith Rajapaksa is a member, was subjugated to arbitrary acquisition, whilst ousting Sajith from his rightful positions, they asserted before Court.
The chain of events may drive DSI Group, which shelters tens of thousands of breadwinners, into a serious crisis in the near future, facts unveiled before Court demonstrated. President’s lawyer Mr. Chandaka Jayasundara appeared for Sajith Rajapaksa and President’s lawyer Mr. Naveen Marapana appeared for his companies.
