Court Dismisses Petition Seeking Action Over Alleged Rs. 13.2 Billion Fraud

The Colombo Commercial High Court has dismissed a petition filed by M. Thiyagaraja seeking authorisation to initiate legal action against National Development Bank PLC (NDB), its directors and external auditors over an alleged fraud involving Rs. 13.2 billion.

High Court Judge Viraj Ranatunge delivered the order on October 9, ruling that the necessary legal requirements to proceed with the application had not been satisfied.

The petition raised concerns over NDB’s corporate governance framework, internal control mechanisms and the accountability of its directors and external auditors in relation to the alleged financial irregularities.

In considering the matter, the Court noted that the bank had indicated its intention to take appropriate action and had already initiated steps to investigate the incident. These included commissioning a forensic audit and lodging a complaint with the Criminal Investigation Department (CID).

The Court further determined that there were insufficient grounds to permit the petitioner to pursue legal proceedings independently of the bank’s directors.

Accordingly, the petition was dismissed, with the Court directing the petitioner to bear the applicable legal costs.