IN THE HIGH COURT OF THE WESTERN PROVINCE HOLDEN IN COLOMBO

Transcription

1 IN THE HIGH COURT OF THE WESTERN PROVINCE HOLDEN IN COLOMBO (Exercising Civil Jurisdiction) Case No. HC(CIVIL) 14/2016 CO Vs. In the matter of an application under and in terms of S. 224, 225 and 233 read together with S. 520 and 521 of the Companies Act No. 7 of Mary Jean Varma Mezzanine Floor - M2, Green Path Residencies, Col. T. G. Jayawardene Mawatha, Colombo 03 PETITIONER 1. Mackwoods Securities (Private) Limited, No. 10, Gnanartha Pradeepa Mawatha, Colombo Dr. Chrisantha Nicholas Anthony Nonis, No. 69/6, Kynsey Road, Colombo Francis Lalith Fonseka, 191/2B, Thimbirigasyaya Road, Colombo Lakshman Leelaraja Samarasinghe, No. 30/3, Dehiwala Road, Pepiliyana. 5. Shelendra Marianne Andrea Nonis Ranaweera, 69/4A, Kynsey Road, Colombo Frederick Germain Noel Mendis, No. 57, Welikadawatte Road, Rajagiriya. Page 1 of 20

2 7. Nirmali Suzanne Moira Samaratunga No. 37/2/A, Empire Residencies, No. 51, Braybrooke Place, Colombo 2. On this 12 th day of May RESPONDENTS The Petition of the Petitioner above named appearing by her Registered Attorneys state as follows :- 1.) The Petitioner pleads that the 1 st Respondent is a duly incorporated private company with limited liability, having its registered office and/or principal place of business within the local limits of the jurisdiction of this Court. A true copy of the Certificate of Incorporation of the 1 st Respondent under its original name of Mackwoods Estates and Agencies Limited, the certificate of change of its name as Mackwoods Securities Limited and the Memorandum and Articles of Association of the 1 st Respondent Company are filed herewith marked P1(a) to P1(c) and pleaded as part and parcel hereof. 2.) The Petitioner further pleads that the 2 nd, 3 rd, 4 th, 5 th, 6 th and 7 th Respondents reside within the local limits of the jurisdiction of this Court. The Petitioner further pleads that the causes of action hereinafter set out arose within the local limits of the jurisdiction of this Court. 3.) The Petitioner pleads that Your Honour s Court has the jurisdiction to hear and determine this matter under and in terms of the provisions of the Companies Act No. 7 of 2007 read together with the High Courts of the Provinces (Special Provisions) Act No. 10 of 1996, as amended. 4.) The Petitioner invokes the jurisdiction of Your Honour s Court in terms of sections 224 and 225 of the Companies Act No.7 of 2007 read with section 521 thereof and Your Honour s Court has the exclusive jurisdiction to hear and determine this matter in terms of the Companies Act No.7 of ) The Petitioner pleads that the Petitioner is the holder of shares which carry not less than 5% of the voting rights at a general meeting of the 1 st Respondent Company as at date and the Petitioner also held the said shares six months prior to the date hereof. The Petitioner further pleads that the Petitioner constitutes not less than 5% of the total number of shareholders of the 1 st Respondent Company in the manner as is morefully pleaded hereinafter. In the circumstances, the Petitioner is entitled in terms of section 226(1)(a) and/or 226(1)(b) of the Companies Act No.7 of 2007 to make this application under and in terms of sections 224 and 225 thereof. Page 2 of 20

3 6.) The Petitioner pleads that; a. the 1 st Respondent company has an issued share capital of 407,000 ordinary voting shares as at date hereof and that those are the only shares issued by the said company; b. The Petitioner holds 117,337 ordinary voting shares of the 1 st Respondent company, which is approximately 28.83% % of the issued voting shares of the 1 st Respondent Company; c. The 2 nd Respondent holds 118,000 ordinary voting shares of the 1 st Respondent company, which is approximately 28.99% of the ordinary voting shares of the 1 st Respondent company; d. The 3 rd, 4 th and 5 th Respondents do not hold any shares of the 1 st Respondent company; e. the 6 th Respondent holds 29,337 ordinary voting shares of the 1 st Respondent company, which is approximately 7.21% of the ordinary voting shares of the 1 st Respondent company; f. The 7 th Respondent holds 98,326 ordinary voting shares of the 1 st Respondent company, which is approximately 24.16% of the ordinary voting shares of the 1 st Respondent company; g. The Petitioner pleads that the Petitioner, together with the 6 th and 7 th Respondents hold an aggregate of 245,000 ordinary voting shares of the 1 st Respondent company, which is approximately 60.19% of the ordinary voting shares of the 1 st Respondent company, and that the Petitioner and the 6 th and 7 th Respondent together accordingly hold a majority of the shares of the 1 st Respondent company; h. the remaining 44,000 shares of the 1 st Respondent company (approximately 10.81% of its ordinary voting shares) have been issued to Mendis-Mackwoods Charity Fund of No. 10, Gnanartha Pradeepa Mawatha, Colombo 08, a company limited by guarantee holding the registration number GA534. A true copy of the most recent Annual Return (Form 15) the 1 st Respondent Company filed at the Registrar of Companies dated 26/09/2013 is annexed herewith marked "P2" and is pleaded as part and parcel hereof. Page 3 of 20

4 The background of the 1 st Respondent company 7.) The Petitioner pleads that to the best of the Petitioner's knowledge and recollection,; a. The 1 st Respondent company was first incorporated on or about 31 st of July 1957 under the name of Mackwoods Estates and Agencies Limited by the famous lawyer cum entrepreneur, the late Mr. N. S. O. Mendis; b. The said Mr. N. S. O. Mendis had three children namely the Petitioner and the 6 th Respondent and the late Mrs. Sriyani Nonis; c. The late Mrs. Sriyani Nonis is the mother of four children including the 2 nd, 5 th and 7 th Respondents; d. The said Mrs. Sriyani Nonis was the Chairperson of 1 st Respondent company and of almost all of the companies comprising the Mackwoods Group of Companies (including Mackwoods holding, subsidiary and associate companies) until her demise on or about 13 th of June 2005; e. The 7 th Respondent had been working for the 1 st Respondent company and its subsidiaries/associates since in or about 1982 and was appointed as the Deputy Chairperson in 2002 of the 1 st Respondent company, and subsequently in or about 2005 as the Co-Chairperson. The Petitioner pleads that the posts of Deputy Chairperson and Co- Chairperson are not posts recognized by the Articles of Association and that the 7 th Respondent did not exercise any authority in excess of the other directors by virtue thereof; f. soon after the death of Mrs. Sriyani Nonis, the 2 nd Respondent assumed the position of the Chairman of 1 st Respondent company; g. the said appointment of 2 nd Respondent as the Chairman was never formally approved and/or consented to by the majority shareholders or the Board of the 1 st Respondent company; h. since the date on which he assumed duties as Chairman, the 2 nd Respondent has never stood for re-election at any of the Annual General Meetings (AGM) of the 1 st Respondent company, as the provisions relating to retirement of directors do not apply to a director holding the post of Chairman; and i. the 2 nd Respondent also assumed the duties as Chairman in all the subsidiary and associate companies of the 1 st Respondent company. Page 4 of 20

5 8.) The Petitioner further pleads that, to the best of her knowledge and recollection; a. The 1 st Respondent company holds 9,984,000 (99.84%) of the ordinary voting shares in Mackwoods (Private) Limited (bearing the company registration number PV 16788) of No. 10, Gnanartha Pradeepa Mawatha, Colombo 08; b. The said Mackwoods (Private) Limited has an issued share capital of 10,000,000 ordinary voting shares and therefore for all intents and purposes, the 1 st Respondent company is the holding company of Mackwoods (Private) Limited; c. The said Mackwoods (Private) Limited has invested in the following Private and Public companies directly and/or indirectly including Public Quoted companies namely Agalawatta Plantations PLC, Mackwoods Energy PLC. Such companies include the following; i. Mackwoods Plantations (Private) Limited ii. Agalawatta Plantations PLC iii. Mackwoods Energy PLC iv. Claridge Asset Management (Private) Limited v. Mackply Industries (Private) Limited vi. Mackwoods Healthcare (Private) Limited vii. Mackwoods Teas (Private) Limited viii. AEN Palm Oil Processing (Private) Limited ix. Paklan Latex (Private) Limited x. Claridge Stockbrokers (Private) Limited xi. Mackwoods IT (Private) Limited xii. Mackwoods Infotec (Private) Limited xiii. Taprospa Resorts (Private) Limited xiv. Mackwoods Insurance Brokers (Private) Limited xv. Mackwoods Real Estate (Private) Limited xvi. Mackwoods Rubber Products (Pvt) Ltd xvii. Mackwoods Foods (Pvt) Ltd 9.) The 1 st Respondent Company's said subsidiary Mackwoods (Pvt) Ltd holds 51% of the ordinary voting shares of the aforementioned Mackwoods Plantations (Private) Limited and 62.93% of the ordinary voting shares of Mackwoods Energy PLC. A true copy of the most recent Annual Return (Form 15) of the said Mackwoods (Private) Limited, Mackwoods Plantations (Private) Limited and the Annual Report of said Mackwoods Energy PLC are filed herewith marked P3 (a) to P3 (c) and pleaded as part and parcel hereof. Page 5 of 20

6 10.) Thus, substantially all of the material business interests of the 1 st Respondent Company are operated and managed through the said Mackwoods (Private) Limited. 11.) The Petitioner pleads that as at 31 st December 2014; a. Mackwoods Plantations (Private) Limited holds 15,200,000 (60.8%) of the ordinary voting shares of Agalawatte Plantations PLC; b. Agalawatte Plantations PLC has obtained 15 estates on lease from Janatha Estates Development Board (JEDB) and Sri Lanka State Plantations Corporation (SLSPC) for a period of 53 years ending in June 2045; c. those 15 estates include tea, rubber and oil palm in the districts of Ratnapura, Kalutara and Nuwara Eliya covering a total extent of 10,919 Hectare (approximately 0.16% of entire land extent of Sri Lanka i.e square km or 26,981 Acres); d. Agalawatte Plantations PLC employs about 6,750 people; e. several high end Boutique Hotels are situated on those estates leased by Agalawatte Plantations PLC namely Culloden Villa, Labookellie Villa, Westward-Ho and Tymawr Villa; f. Agalawatte Plantations PLC held 100% of the issued share capital of Taprospa Resorts (Private) Limited until in or about 2011 when a company named Taprospa Holdings (Private) Limited, in which the 2 nd Respondent holds almost 99.9% of issued share capital, became the owner of 60% of the shares of Taprospa Resorts (Private) Limited. The Petitioner pleads that this was done at the instance of the 2 nd Respondent for reasons unbeknown to the Board. The Petitioner pleads that at the time Taprospa Holdings (Private) Limited became the holder of such shares in Taprospa Resorts (Private) Limited the Petitioner was not aware that the 2 nd Respondent was a shareholder of the said Taprospa Holdings (Private) Limited, and to the best of her recollection such fact had not been disclosed to the 1 st Respondent Company at the material time; g. The said Taprospa Resorts (Private) Limited owns luxury hotels Taprospas Footprints in Beruwala, Taprospa Tissa in Tissamaharama and Taprospa Palm Leaves in Jaffna, all having substantial assets and generating income. The Petitioner pleads that the value of assets of the Taprospa Resorts (Private) Limited exceeds Rs. 1 Billion. Page 6 of 20

7 The Petitioner annexes hereto marked "P4a" to "P4f" true copies of the Annual Reports of Agalawatta Plantations PLC from 2010 to 2014 and the annual return of Taprospa Holdings (Private) Limited and pleads the same as part and parcel hereof. The Petitioner further annexes hereto marked 'P4g' compenditiously the cover page of the Explore Sri Lanka Magazine for January 2016 and page 130 thereof, which contains an advertisement of such properties and pleads the same as part and parcel hereof. The Petitioner also annexes hereto marked 'P4h' a true copy of a brochure in respect of the said properties and pleads the same as part and parcel hereof. 12.) The Petitioner pleads that Board of Directors of 1 st Respondent Company controls all the subsidiary and associate companies of 1 st Respondent Company. Disproportionate representation of shareholders in Board of Directors 13.) The Petitioner pleads that; a. at present there are 6 Directors in the 1 st Respondent company viz. Petitioner and the 2 nd, 3 rd, 4 th and 5 th and 7 th Respondents; b. the 3 rd, 4 th and 5 th Respondents have, from in or about the time that the 2 nd Respondent assumed duties as the Chairman, acted solely in accordance with the dictates, instructions and directions of the 2 nd Respondent; c. the 3 rd Respondent is also the company secretary of the 1 st Respondent company; d. approximately 60.19% of the shareholders are represented by only two (2) Directors (namely the Petitioner and the 7 th Respondent) and approximately 39.81% of the shareholders are represented by four (4) Directors (namely the 2 nd, 3 rd, 4 th and 5 th Respondents), and; e. the 1 st Respondent company can have a maximum of 9 Directors in terms of Article 72 of its Articles of Association. 14.) The Petitioner further pleads that the Petitioner and the 6 th and 7 th Respondents, being the major shareholders of the 1 st Respondent Company, accordingly do not at present have due and proper representation on the Board of Directors of the 1 st Respondent Company. Page 7 of 20

8 Boards of Directors of subsidiary/associate companies of 1 st Respondent 15.) The Petitioner pleads that the Boards of Directors of the associate/subsidiary companies of the 1 st Respondent consist of certain nominees of the 1 st Respondent Company, which nominees are nominated by the Board of the 1 st Respondent in the exercise of its shareholding in such subsidiary/associate companies. The Petitioner pleads that she is not certain of the exact composition of the Boards of Directors of such subsidiary/associate companies, but to the best of her knowledge and recollection they are as is morefully depicted in the document annexed hereto marked "P5" which is pleaded as part and parcel hereof. The Petitioner further annexes hereto marked "P6" a true copy of the Memorandum and Articles of Association of Mackwoods (Pvt) Ltd, (formerly Mackwoods Limited) and pleads the same as part and parcel hereof. 16.) The Petitioner pleads that; (a) the board of directors of the 1 st Respondent exerts control over the said subsidiary/associate companies; (b) there are vacancies on the Boards of several of the said subsidiary/associate companies. 17.) The Petitioner pleads that to the best of her knowledge, in terms of the respective Articles of such subsidiary/associate companies, the Boards of Directors of such companies, which are controlled by the 2 nd, 3 rd, 4 th and 5 th Respondents, has the power to fill vacancies on the said Boards, without recourse to the shareholders. The Petitioner pleads however that such a course of action would be against the wishes and intention of the holders of the majority of the shares of the 1 st Respondent company, i.e. the Petitioner and the 6 th and 7 th Respondents. Oppression and Mismanagement 18.) The Petitioner pleads that under the present management of the 2 nd to 5 th Respondents, the affairs of the 1 st Respondent Company and that of its subsidiaries and associate companies are being conducted in a manner which is oppressive of its shareholders and also constitutes mismanagement of the affairs of the 1 st Respondent Company. Annual General Meeting 19.) The Petitioner pleads that the Board of Directors of the 1 st Respondent Company, which as aforesaid is controlled by the 2 nd, 3 rd, 4 th and 5 th Page 8 of 20

9 Respondents, has failed and neglected to hold an Annual General Meeting since on or about 30/09/2008. The Petitioner pleads that though the last annual return filed by the 1 st Respondent Company refers to the last Annual General Meeting having been held on or about 12/09/2013, or that the resolution in lieu thereof bore such date, the Petitioner pleads that to the best of her knowledge and recollection, no such Annual General Meeting of the 1 st Respondent has been held since 2008 and no resolution in lieu thereof has been signed by its shareholders. The Petitioner pleads that the failure to hold an Annual General Meeting is contrary to the imperative provisions of the Companies Act No. 7 of 2007, and more specifically S. 133 thereof. 20.) The Petitioner pleads that by reason of the fact that such Annual General Meeting has not been held; a) The directors of the 1 st Respondent Company who are scheduled to retire from office by rotation have not retired nor presented themselves for re-election, and the shareholders of the 1 st Respondent Company have thus been prejudiced by inter alia being deprived of the right to vote on such re-election and/or on the reconstitution of the board of Directors of the 1 st Respondent Company; b) The accounts and financial statements of the 1 st Respondent Company have not been placed before the shareholders and have in any event not been approved by the shareholders. c) In any event, the audited accounts of the 1 st Respondent Company have not been sent to the Shareholders. 21.) The Petitioner pleads that this in itself amounts to mismanagement of the 1 st Respondent Company. Group Losses 22.) The Petitioner pleads that as set out hereinbefore, the 1 st Respondent Company is the ultimate holding Company of several very large and well-known business establishments in Sri Lanka, commonly referred to as the Mackwoods Group. 23.) The Petitioner pleads that the 1 st Respondent Company almost fully owns Mackwoods (Pvt) Ltd. (i.e %) and thus controls Companies with an aggregate asset value in excess of Rs. 6 Billion. The Petitioner pleads that it has not considered value of the Mackwoods brand and other brands for the purpose of such approximate valuation. 24.) The Petitioner pleads that the 1 st Respondent Company also has substantial shareholding in the several subsidiary companies set out above. The Petitioner Page 9 of 20

10 pleads that several of such subsidiaries have substantial assets under management. 25.) The Petitioner pleads that as set out above, one such subsidiary, Agalawatta Plantations PLC manages 15 estates which include tea, rubber and oil palm covering a total extent of 10,919 Hectares and employs approximately 6,750 persons. 26.) The Petitioner pleads that the approximate value of the total assets of Agalawatta Plantations PLC alone, as extracted from the Financial Highlights of its 2014 Annual Report (at page 04 thereof) are Rs. 4,492,065,000/-. 27.) The Petitioner pleads however that the affairs of the said Agalawatta Plantations PLC are being mismanaged by its board, which is controlled by the 2 nd, 3 rd, 4 th and 5 th Respondents, to such an extent that its business and operations are being run at a loss as is reflected in the 2014 Annual Report of the said Agalawatte Plantations PLC. The Petitioner pleads that this is despite the colossal value of assets at its disposal, and the value and potential of its business. 28.) The Petitioner pleads that the only plausible explanation for this is that the 2 nd, 3 rd, 4 th and 5 th Respondents are either guilty of siphoning off monies from the Agalawatta Plantations PLC, or are otherwise guilty of serious mismanagement of its affairs. 29.) The Petitioner pleads that this in itself amounts to mismanagement, by the 2 nd, 3 rd, 4 th and 5 th Respondents, of the affairs of the most valuable asset of the 1 st Respondent Company. 30.) The Petitioner pleads that the manner in which the affairs of Agalawatta Plantations PLC have been mismanaged is evident from the several newspaper articles, true copies of which are annexed hereto marked 'P7a' to 'P7d' and are pleaded as part and parcel hereof. Dividends 31.) The Petitioner pleads that to the best of her knowledge the boards of directors of the aforesaid subsidiaries and associates of the 1 st Respondent Company are controlled by the 2 nd, 3 rd, 4 th and 5 th Respondents. The Petitioner pleads that by reason of such control, the senior management of such subsidiaries and associates, including their respective Chief Executive Officers act in accordance with the directions and control exerted by the said 2 nd, 3 rd, 4 th and 5 th Respondents. Page 10 of 20

11 32.) The Petitioner pleads that the 2 nd, 3 rd, 4 th and 5 th Respondents have ensured that the profits or potential profits of the operational subsidiaries and associates of the 1 st Respondent Company are siphoned off and/or otherwise disposed of, to the personal benefit of the said 2 nd, 3 rd, 4 th and 5 th Respondents, prior to such profits having to be declared to their holding companies. The Petitioner pleads that in such manner, the 2 nd, 3 rd, 4 th and 5 th Respondents have avoided making payment to the other shareholders of the 1 st Respondent Company of dividends and/or returns in the value to which they are in truth and in fact entitled. 33.) The Petitioner pleads that notwithstanding such a vast asset base as is controlled by the 1 st Respondent Company, the 2 nd to 5 th Respondents have conducted the affairs of both the 1 st Respondent Company and its subsidiaries in such a manner as to deprive the Petitioner and 6 th and 7 th Respondents of the dividend which should rightfully accrue to them, given the nature and size of the group of Companies which are controlled by the 1 st Respondent Company. 34.) The Petitioner pleads that, since 2005, dividends have been declared and paid to the Petitioner only in the following sums; Table of dividends received by the Petitioner from 2005 to 2014; Year Gross Dividend (Rs.) Net Dividend (Rs.) 2005 (1 st interim) 345, , (2 nd interim) 345, , (3 rd interim) 345, , (Final) 345, , (1 st interim) 690, , (2 nd interim) 345, , (Final) 345, , (1 st interim) 690, , (2 nd interim) 345, , (Final) 345, , (1 st interim) 345, , (Final) 1,035, , (Interim) 345, , (Final) 1,035, , (100% dividend) 1,380,435 1,173, (100% dividend) 1,380,436 1,173, (100% dividend) 1,303,745 1,173, (presumed to be interim) (not aware) 438,370 Page 11 of 20

12 The Petitioner annexes hereto marked 'P8a' to 'P8q' true copies of the documents in support thereof and pleads the same as part and parcel hereof. 35.) The Petitioner pleads that in addition to the dividends reflected in the above documents 'P8a' to 'P8q', the Petitioner also received a sum of Rs 438,370/- on or about 12/10/2015, which she presumes to be an interim dividend. Other detrimental transactions 36.) The Petitioner pleads that by virtue of being the Chairman of the 1 st Respondent Company, the 2 nd Respondent is also the Chairman of the 1 st Respondent's other aforesaid subsidiaries. The Petitioner pleads that, by reason of the control exerted by the 2 nd, 3 rd, 4 th and 5 th Respondents, they have been instrumental in and have caused several of such subsidiaries to enter into transactions to the detriment of such companies, to their own personal benefit. The Petitioner pleads that as the majority of the shares in such subsidiaries are held by the 1 st Respondent Company, such transactions are detrimental to the 1 st Respondent Company. 37.) The Petitioner pleads that two of such transactions are as follows. Agalawatta Plantations PLC / APL 38.) The Petitioner pleads that Agalawatta Plantations PLC is commonly referred to in the trade as "APL", and any reference to APL is commonly understood to be a reference to the said Agalawatta Plantations PLC. The Petitioner further pleads that the 2014 Annual Report of Agalawatta Plantations PLC itself refers to Agalawatta Plantations PLC as APL. 39.) The 2 nd and 5 th Respondents, have however caused a company to be incorporated under the name of APL Teas (Pvt) Ltd, of which they are the sole shareholders and are directors. The Petitioner annexes hereto marked "P9" a true copy of the Annual Return of the said APL Teas (Pvt) Ltd and pleads the same as part and parcel hereof. 40.) The Petitioner pleads however that the 2 nd and 5 th Respondents have deliberately concealed the fact that the said APL Teas (Pvt) Ltd was privately owned by the 2 nd and 5 th Respondents from the Petitioner and the 6 th and 7 th Respondents, who were under the impression that it was a subsidiary of Agalawatta Plantations PLC. 41.) The said APL Teas (Pvt) Ltd purchases tea from Agalawatta Plantations PLC despite the failure by the 2 nd and 5 th Respondents to disclose their shareholding in the said APL Teas (Pvt) Ltd to Agalawatta Plantations PLC. Page 12 of 20

13 42.) The Petitioner pleads that the said 2 nd and 5 th Respondents are deliberately, and with ulterior intent usurping the goodwill of Agalawatta Plantations PLC by having their company incorporated under the name APL Teas (Pvt) Ltd, and are gaining an undue advantage in the sales of teas from such association, to the detriment of the said Agalawatta Plantations PLC. The said APL Teas (Pvt) Ltd have also, with deliberate and ulterior intent, been running and operating a chain of tea cafes under the name of 'Tea Breeze' while falsely and fraudulently misrepresenting that they were part of the Mackwoods Group. The Petitioner annexes hereto marked 'P10a' a true copy of the advertisement at page 131 of the Explore Sri Lanka magazine for January 2016 and pleads the same as part and parcel hereof. A true copy of an invoice of the said APL Teas (Pvt) Ltd dated 02/03/2015 is annexed hereto marked 'P10b' and are pleaded as part and parcel hereof, 43.) The said APL Teas (Pvt) Ltd is also engaged in marketing and sale of value added teas, under the brand name Mackwoods fine tea. The Petitioner pleads that, to the best of her knowledge, no company within the Mackwoods group is paid royalties for the use by APL Teas (Pvt) Ltd of the "Mackwoods" brand. The said APL Teas (Pvt) Ltd further fraudulently passes itself off as a member of the Mackwoods Group of companies. 44.) The said APL Teas (Pvt) Ltd engages in several other transactions with Agalawatta Plantations PLC from and out of which the said APL Teas (Pvt) Ltd derives income. The Petitioner pleads that such transactions include the service of local and overseas marketing of value added tea, international promotion and overseas trade participation. 45.) The Petitioner pleads that, as is set out above, the payments made to APL Teas (Pvt) Ltd, purportedly on account of Brand Development and International Marketing cost amount to upto 95% of the value of teas sold through it in certain years. The Petitioner pleads that the payments made as aforesaid are grossly excessive and are demonstrative of the 2 nd and 5 th Respondents having siphoned off large sums of money from the said Agalawatta Plantations PLC, to the detriment of the company and its shareholders, and more particularly to the detriment of the 1 st Respondent Company as the ultimate beneficial owner of shares in the said Agalawata Plantations PLC, and its shareholders including the Petitioner hereof. 46.) As is disclosed in the Annual Returns of the said Agalawatta Plantations PLC, the said APL Teas (Pvt) Ltd has been paid large sums of money by Agalawatta Plantations PLC, purportedly on the basis of Brand Development and International Marketing cost. The Petitioner pleads that the monies paid to APL Teas (Pvt) Ltd from 2010 to 2014 alone, as compared to the value of teas sold by it are as follows; Page 13 of 20

14 Year Value of Tea sold through APL Teas (Pvt) Ltd (Rs.) Million Million Million 39 Million Million 27.8 Million Million 41.4 Million Million 34.7 Million Payments for "Brand Development and International Marketing" (Rs.) 47.) The Petitioner further pleads that the fact that the beneficial owners of the said APL Teas (Pvt) Ltd are the 2 nd and 5 th Respondents has not been disclosed to Agalawatta Plantations PLC. Taprospa 48.) The Petitioner pleads that a further company by the name Taprospa Holdings (Pvt) Ltd has been incorporated by the 2 nd and 3 rd Respondents, in which the shareholders are the 2 nd and 3 rd Respondents. The Petitioner pleads that the 2 nd Respondent owns 99.9% of the shares of Taprospa Holdings (Pvt) Ltd. The Directors of such Company are the 2 nd, 3 rd and 5 th Respondents. 49.) Agalawatta Plantations PLC had previously owned 100% of the shares of a company named Taprospa Resorts (Pvt) Ltd, which was engaged in business in the leisure sector. To the best of the Petitioner's knowledge, in or around the year 2011 the aforesaid Taprospa Holdings (Pvt) Ltd acquired 60% of the shares of Taprospa Resorts (Pvt) Ltd, without proper approvals and/or value being received by Agalawatta Plantations PLC. 50.) The fact that Taprospa Holdings (Pvt) Ltd was owned by the 2 nd and 3 rd Respondents has not been disclosed to Agalawatta Plantations PLC, and transactions with Taprospa Holdings (Pvt) Ltd have accordingly been entered into by Agalawatta Plantations PLC without knowledge of such fact. 51.) The Petitioner pleads that substantial investments have been made in Taprospa Resorts (Pvt) Ltd through Agalawatta Plantations PLC, of which Agalawatta Plantations PLC is a minority shareholder and pleads that such investments have been made has solely by reason of the control exerted by the 2 nd, 3 rd, 4 th and 5 th Respondents over Agalawatta Plantations PLC, for their own personal benefit. 52.) The Petitioner thus pleads that the 2 nd, 3 rd, 4 th and 5 th Respondents are guilty of mismanagement of the affairs of the 1 st Respondent Company and oppression of its shareholders. Page 14 of 20

15 53.) The actions of the 2 nd, 3 rd, 4 th and 5 th Respondents have caused loss and damage to the 1 st Respondent Company and to its shareholders. Appointment of new directors of the 1 st Respondent Company in terms of its Articles 54.) The Petitioner pleads that the Petitioner and the 6 th and 7 th Respondent have, acting under and in terms and in pursuance of their rights as shareholders of the 1 st Respondent, requisitioned an Extraordinary General Meeting of shareholders of the 1 st Respondent to be held for the purpose of the shareholders considering, voting upon and if though fit passing resolutions appointing three (3) directors to the Board of the 1 st Respondent Company, to fill the remaining three vacancies thereon. 55.) The Petitioner pleads that the said Extraordinary General Meeting was requisitioned by the communication dated 12 th May 2016 signed by the Petitioner and the 6 th and 7 th Respondents, which was deposited at the registered office of the 1 st Respondent Company on 12 th May The Petitioner annexes hereto marked P11 a true copy of the said Requisition together with the annexures thereof and marked P11(a) a true copy of proof of dispatch thereof by means of registered post and pleads the same as part and parcel hereof. 56.) The Petitioner pleads that by such requisition, the Petitioner and the 6 th and 7 th Respondents have sought the appointment of three (3) highly esteemed and qualified persons as Directors of the 1 st Respondent company. True copies of the resumes of the said three nominee Directors are annexed hereto marked as P12(a) to P12(c) respectively and pleaded as part and parcel hereof. The Petitioner's apprehension 57.) However, despite the above course of action being one which the Petitioner and the 6 th and 7 th Respondents are entitled to take in law and in terms of the Articles of Association of the 1 st Respondent Company, the Petitioner is apprehensive that the 2 nd to 5 th Respondents may seek to stymie and thwart the aforesaid resolutions before they are put to a vote by the shareholders by seeking to fill either all or some of the three (3) vacancies on the Board of Directors of the 1 st Respondent, abusing their powers in terms of Article 91 of the Articles of Association of the 1 st Respondent Company. 58.) The Petitioner further verily apprehends that the 2 nd to the 5 th Respondents may act in such a manner so as to delay the holding of the said Extraordinary Page 15 of 20

16 General Meeting, despite the fact that they are bound and obliged, in terms of the Law and the Articles of Association of the 1 st Respondent Company, and more specifically S.134 of the Companies Act No. 7 of 2007 and Article 46 of the Articles of Association of the 1 st Respondent, to convene such meeting forthwith. 59.) The Petitioner pleads that the 2 nd to the 5 th Respondents may do so in an unlawful attempt to retain a majority on the Board of Directors, for the purpose of prolonging their control of the 1 st Respondent and its subsidiaries and associate companies, contrary to the wishes of the majority of the shareholders of the 1 st Respondent Company. 60.) The Petitioner pleads that she apprehends that the 2 nd to 5 th Respondents would refrain from convening the said EGM. 61.) The Petitioner pleads that the Board of Directors of the 1 st Respondent Company has consisted of six members from or about ) The Petitioner pleads that there have been vacancies on the Board of Directors of the 1 st Respondent Company from or about 2009 to date. 63.) The Petitioner pleads that at no time was it contemplated to fill the aforesaid vacancies nor was it considered necessary to fill the aforesaid vacancies by the directors as additional directors. 64.) In the circumstances the Petitioner pleads that the only purpose of filling the aforesaid vacancies by the directors is to circumvent the resolution for which the Extraordinary General Meeting is to be convened. 65.) The Petitioner pleads that the directors have a fiduciary duty to act in the best interests of the 1 st Respondent Company. 66.) The Petitioner pleads that the directors have a duty to act bona fide and if acting mala fide in filling the vacancies they are not duly and properly acting in terms of the Articles of Association of the 1 st Respondent Company. 67.) The Petitioner specifically pleads that if the directors act to fill a vacancy on the Board of Directors in the circumstances set out aforesaid, they would be acting in breach of the Articles of Association of the 1 st Respondent Company in that inter alia they are acting in breach of their fiduciary duties against the interests of the 1 st Respondent Company. Page 16 of 20

17 68.) The Petitioner pleads that the Petitioner requested an Annual General Meeting to be held and for the accounts to be circulated, but the 2 nd Respondent has failed to do so. 69.) The Petitioner pleads that any such conduct as set out above is in contravention of the Articles of Association of the 1 st Respondent company and also in contravention of the provisions of the Companies Act. The Petitioner further pleads that such action in itself would amount to oppression and mismanagement by the 2 nd to the 5 th Respondents. 70.) The Petitioner pleads that she apprehends that 2 nd to 5 th Respondent would take measures to fill other Board positions in the 1 st Respondent company with Additional Directors before the appointment of additional Directors in terms of the requisition annexed hereinbefore marked P11 can be voted on and if thought fit passed by the shareholders of the 1 st Respondent, and that the 2 nd to the 5 th Respondents would thereby stymie the effect of the said EGM. 71.) The Petitioner pleads that it is the common objective of the Petitioner and the 6 th and 7 th Respondents to seek to reconstitute the Boards of Directors of the 1 st Respondent's Subsidiary/Associate companies once their aforesaid three (3) nominees are appointed to the Board of the 1 st Respondent, and upon them being able to exert control over the shares held by the 1 st Respondent through its Board. The Petitioner annexes hereto marked "P13" a true copy of a communication signed by the 6 th and 7 th Respondents to this effect and pleads the same as part and parcel hereof. 72.) The Petitioner expressly pleads that the 2 nd to the 5 th Respondents are likely to conduct themselves in such a manner so as to prevent the Petitioner and the 6 th and 7 th Respondents from exercising their rights as the holders of the majority of the shares in the 1 st Respondent Company. 73.) The Petitioner pleads that in terms of Article 89 of the Articles of Association of the 1 st Respondent Company, once the position of Director is filled, such a Director cannot be removed other than by Special Resolution of the shareholders voting for such removal. The Petitioner thus pleads that by the filling of the vacant Board positions by way of a casual vacancy, the 2 nd to 5 th Respondents would effectively be preventing the majority of the shareholders of the 1 st Respondent Company from being able to have a say in the manner in which the Board of Directors of the 1 st Respondent Company should be constituted. 74.) The Petitioner further pleads that in the event the 2 nd to 5 th Respondents are not prevented from conducting themselves in the manner morefully set out above, Page 17 of 20

18 grave and irreparable loss and damage would be caused to the Petitioner and/or the 1 st Respondent Company and its subsidiaries/associate companies. 75.) The Petitioner pleads that in the circumstances aforesaid grave and irreparable loss and damage would be caused in the event the interim relief sought for herein are not granted. Relief sought 76.) The Petitioner pleads that in the foregoing circumstances, the Petitioner is entitled to seek the following relief from Your Honour's Court; a. an order and/or declaration that the affairs of the 1 st Respondent are being conducted by the 2 nd, 3 rd, 4 th and/or 5 th Respondents in a manner oppressive of and/or to the Petitioner; b. an order and/or declaration that the affairs of the 1 st Respondent are being conducted by the 2 nd, 3 rd, 4 th and/or 5 th Respondents in a manner which is against the interests of the 1 st Respondent Company; c. an order and/or declaration that the affairs of the 1 st Respondent Company have been mismanaged by the 2 nd to 5 th Respondents; d. an order and/or declaration that the 2 nd, 3 rd, 4 th and 5 th Respondents and/or any one of more of them are not entitled to appoint any directors and/or fill any vacancy on the board of the 1 st Respondent company until the conclusion of the Extraordinary General Meeting requisitioned by requisition dated 12 th May 2016 and annexed hereinbefore marked P11; e. an order and/or declaration that the 2 nd, 3 rd, 4 th and 5 th Respondents and/or any one of more of them are not entitled to act in contravention of the Articles of Association of the 1 st Respondent Company; f. an interim order restraining the 2 nd, 3 rd, 4 th and 5 th Respondents and/or any one of more of them from appointing any directors and/or seeking to fill any vacancy on the board of the 1 st Respondent company until the conclusion of the Extraordinary General Meeting requisitioned by requisition dated 12 th May 2016 and annexed hereinbefore marked P11; An interim order restraining the 2 nd, 3 rd, 4 th and 5 th Respondents and/or any one of more of them from acting in contravention of the Articles of Association of the 1 st Respondent Company. Page 18 of 20

19 77.) The Petitioner pleads that in terms of the Companies Act No. 7 of 2007, and particularly S. 187 thereof, the 2 nd to the 5 th Respondents are bound, as directors of the 1 st Respondent, to exercise their powers and perform their duties as directors in good faith and in the interests of the 1 st Respondent Company. The Petitioner pleads that thus, under and in terms of S. 233 of the Companies Act No. 7 of 2007 also, the Petitioner is entitled to the relief prayed for herein. 78.) The Petitioner further annexes hereto marked P14 and pleads as part and parcel hereof an undertaking in writing that if the interim orders prayed for herein are granted, and the 1 st Respondent Company or any other person suffers loss or damage which the Court considers as just and equitable for the Petitioner to bear, the Petitioner will indemnify the 1 st Respondent Company or such other person against such loss or damage. 79.) The Petitioner further respectfully moves that Court be pleased, in fixing the amount of security to be provided by the Petitioner for the undertaking given in terms of S. 521(2) to permit the Petitioner to furnish such security by providing a bank guarantee, or in some other such similar manner as Court may consider sufficient. 80.) The Petitioner pleads that in any event it is just and equitable that the interim relief set out for above are granted by Court. 81.) An Affidavit of the Petitioner is annexed hereto in support of the averments contained herein. WHEREFORE the Petitioner prays for; a. an order and/or declaration that the affairs of the 1 st Respondent are being conducted by the 2 nd, 3 rd, 4 th and/or 5 th Respondents in a manner oppressive of and/or to the Petitioner; b. an order and/or declaration that the affairs of the 1 st Respondent are being conducted by the 2 nd, 3 rd, 4 th and/or 5 th Respondents in a manner which is against the interests of the 1 st Respondent Company; c. an order and/or declaration that the affairs of the 1 st Respondent Company have been mismanaged by the 2 nd to 5 th Respondents; d. an order and/or declaration that the 2 nd, 3 rd, 4 th and 5 th Respondents and/or any one of more of them are not entitled to appoint any directors and/or fill any vacancy on the board of the 1 st Respondent company until the conclusion of the Extraordinary General Meeting requisitioned by requisition dated 12 th May 2016 and annexed hereinbefore marked P11; Page 19 of 20

20 e. an order and/or declaration that the 2 nd, 3 rd, 4 th and 5 th Respondents and/or any one of more of them are not entitled to act in contravention of the Articles of Association of the 1 st Respondent Company; f. an interim order restraining the 2 nd, 3 rd, 4 th and 5 th Respondents and/or any one of more of them from appointing any directors and/or seeking to fill any vacancy on the board of the 1 st Respondent company until the conclusion of the Extraordinary General Meeting requisitioned by requisition dated 12 th May 2016 and annexed hereinbefore marked P11; g. An interim order restraining the 2 nd, 3 rd, 4 th and 5 th Respondents and/or any one of more of them from acting in contravention of the Articles of Association of the 1 st Respondent Company; h. for costs; and i. for such other and further relief as to this Court may seem meet Registered Attorneys-at-Law for the Petitioner Page 20 of 20