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Auto Company mulls legal action against ex People’s Merchant Leasing Company Chairman
Sat Dec 27, 2014 9:45 pm
For alleged default of Rs. 2.25 mn on purchase of two vehicles
BY SURESH PERERA
A leading automobile parts company is contemplating legal action against the former Chairman of a government-controlled company in the financial service industry for alleged default of Rs. 2.25 million due as final payments on the purchase of two vehicles.
Three cheques to the value of Rs. 3 million given by him to meet the due payments had bounced as the HSBC account had been closed at the time of their issuance.
The company, Japan Lanka Auto Parts (Pvt) Limited of Mirihana, Nugegoda, has already sent a letter of demand through its lawyer, Namasena Gamage, seeking payment of the money "lawfully due within two weeks".
At the time Ajith Panditaratne served as the Chairman of People’s Merchant Leasing Company PLC, he had entered into a legal contract with the company in November, 2010 to purchase two Toyota Axio motor cars for Rs. 9.2 million. He had undertaken to settle the total due amount within one year.
Although it was a raw deal, the company agreed to a time extension for settlement based on representations made by the buyer (Chairman) considering, inter alia, that he is personally very close to the top most authorities in the country and that he served as the head of a state-owned financial institution, which had secured an A+ Rating, the letter of demand stated.
It was discovered that the cheques had been drawn from the account of the Chairman’s personal assistant, and there are doubts whether such a person could maintain an account in this bank. There are also doubts whether this account was actually maintained by the Chairman himself under the name of his assistant, it further noted.
"We sent the letter of demand in October 2014, but he has still not responded to it", a senior official of Japan Lanka Auto Parts, said. "He is also avoiding answering our telephone calls".
"We are now in the process of initiating legal action against him", he noted. "We entered into a legal agreement with him based on trust, but we have been led up the garden path".
Apart from instituting legal proceedings against him to recover outstanding dues with costs, criminal action will also be filed on the dishonored cheques, the official explained.
Asked why he had defaulted on the payments, Panditaratne said he "ran into some problems which resulted in the delay". The two cars were purchased for his personal use and not for People’s Merchant Leasing Company, where he served as Chairman at the time.
He said that he had kept in touch with the company and briefed them on the developments with an assurance he will honor his commitment shortly.
"That’s bunkum. He continues to duck and our repeated phone calls are also not answered", the official interjected. "When we use a different number, he answers, but immediately hangs up saying he is busy".
"I can give a categorical assurance that I will pay back the money in the second week of January 2015", Panditaratne said. "I will call the company immediately and assure them that it will be done".
Contacted again five days after Panditaratne gave this assurance, the company official described it as "typical bluff". This is just eye wash. He didn’t call, and is not expected do so in the future either.
"We have decided to seek legal redress as this hide-and-seek game cannot be allowed to continue", he said. "We have suffered a substantial financial loss as a result".
The former Chairman, it is understood, is closely connected to the powers-that-be, which warranted his appointment to head the state-owned financial institution at the time.
www.island.lk
BY SURESH PERERA
A leading automobile parts company is contemplating legal action against the former Chairman of a government-controlled company in the financial service industry for alleged default of Rs. 2.25 million due as final payments on the purchase of two vehicles.
Three cheques to the value of Rs. 3 million given by him to meet the due payments had bounced as the HSBC account had been closed at the time of their issuance.
The company, Japan Lanka Auto Parts (Pvt) Limited of Mirihana, Nugegoda, has already sent a letter of demand through its lawyer, Namasena Gamage, seeking payment of the money "lawfully due within two weeks".
At the time Ajith Panditaratne served as the Chairman of People’s Merchant Leasing Company PLC, he had entered into a legal contract with the company in November, 2010 to purchase two Toyota Axio motor cars for Rs. 9.2 million. He had undertaken to settle the total due amount within one year.
Although it was a raw deal, the company agreed to a time extension for settlement based on representations made by the buyer (Chairman) considering, inter alia, that he is personally very close to the top most authorities in the country and that he served as the head of a state-owned financial institution, which had secured an A+ Rating, the letter of demand stated.
It was discovered that the cheques had been drawn from the account of the Chairman’s personal assistant, and there are doubts whether such a person could maintain an account in this bank. There are also doubts whether this account was actually maintained by the Chairman himself under the name of his assistant, it further noted.
"We sent the letter of demand in October 2014, but he has still not responded to it", a senior official of Japan Lanka Auto Parts, said. "He is also avoiding answering our telephone calls".
"We are now in the process of initiating legal action against him", he noted. "We entered into a legal agreement with him based on trust, but we have been led up the garden path".
Apart from instituting legal proceedings against him to recover outstanding dues with costs, criminal action will also be filed on the dishonored cheques, the official explained.
Asked why he had defaulted on the payments, Panditaratne said he "ran into some problems which resulted in the delay". The two cars were purchased for his personal use and not for People’s Merchant Leasing Company, where he served as Chairman at the time.
He said that he had kept in touch with the company and briefed them on the developments with an assurance he will honor his commitment shortly.
"That’s bunkum. He continues to duck and our repeated phone calls are also not answered", the official interjected. "When we use a different number, he answers, but immediately hangs up saying he is busy".
"I can give a categorical assurance that I will pay back the money in the second week of January 2015", Panditaratne said. "I will call the company immediately and assure them that it will be done".
Contacted again five days after Panditaratne gave this assurance, the company official described it as "typical bluff". This is just eye wash. He didn’t call, and is not expected do so in the future either.
"We have decided to seek legal redress as this hide-and-seek game cannot be allowed to continue", he said. "We have suffered a substantial financial loss as a result".
The former Chairman, it is understood, is closely connected to the powers-that-be, which warranted his appointment to head the state-owned financial institution at the time.
www.island.lk
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