Interim orders issued against Global Grange Lanka and directors

On or around May 16, 2018, pursuant to an application made by two directors of Global Grange Lanka (Pvt.) Limited, namely Raj Matharu and Harpal Matharu, the Commercial High Court of Colombo granted interim orders restraining the company and its other directors from preventing Raj and Harpal from acting as directors and also preventing Priya Matharu and Tara Matharu from acting as directors of the said company.

The petitioners, Raj and Harpal Matharu, were represented in court by President Counsel Kuvera de Zoysa with Attorneys-at-Law Nishan Premathiratne and Ameer Mahuroof on the instruction of Attorney-at-Law Sanjay Fonseka.

The petitioners being Raj and Harpal (Harp) Matharu, together with their brother Tejinderpal (Tony) Matharu, are collectively ranked the 130th richest in the United Kingdom, with a collective net worth of approximately GBP 1 billion and are the owners of the leading ‘Grange’ Hotel chain in the United Kingdom. 

Complaining that they had been wrongfully and unlawfully removed as directors from their Sri Lankan company, namely Global Grange Lanka (Pvt.) Limited, the petitioners Raj and Harp filed action in the Commercial High Court of Colombo, naming as respondents, their brother Tony, their Sri Lankan associate Kalyanawansa Hettiarachchi, Deepkia Hettiarachchi, Priya Matharu and Tara Martharu, amongst others.

The petition filed stated inter alia that the three brothers initially set up Global Grange Lanka (Pvt.) Limited with the intention of expanding their business to Sri Lanka. The said company was incorporated with the assistance of one Kalyanawansa (Wansa) Hettiarachchi, who was a Sri Lankan associate introduced to the petitioners by their brother Tony. 

It was also agreed that Wansa would carry out the affairs of the Sri Lankan company, subject to the direction and control of the Matharu brothers. Accordingly, a land in Galle was purchased by Global Grange Lanka in the year 2006, with the total investment being made by the Matharu brothers. Thereafter, upon representations being made by Wansa to dispose of the said land for a profit, it was agreed by the brothers to dispose of the said land.

The petitioners further stated that as represented to them, the land was sold at a sum of approximately Rs.70 million, whereas subsequently, a representative of the company that purchased the land indicated that a further sum of approximately Rs.33 million had been paid to the said Wansa Hettiarachchi, by a bank draft. 

According to the petitioners’ lawyers, it also came to light that Tony Matharu had allegedly been working hand in glove with the said Wansa Hettiarachchi to siphon monies due to the company. 
Subsequently, the petitioners had become aware after a search at the Registrar of Companies that Wansa Hettiarachchi and Tony Matharu had surreptitiously taken steps to appoint two new directors, Priya and Tara Matharu, without notice to the petitioners. The said new directors are the daughters of Tony Matharu. Thereafter, further steps were taken to use the newly appointed directors to remove the petitioners as directors.

It was submitted to court on behalf of the petitioners that the removal of the petitioners as directors was part of a scheme by the respondents to cover up the misappropriation of monies that were due to the company.

The petitioners complained to court that the appointment of the directors was illegal and contrary to the Articles of Association and Companies Act No.7 of 2007. 

It was further complained that even the subsequent removal of Raj and Harp Matharu (the petitioners) was also illegal. 

It was further contended that the said new directors, Priya and Tara Matharu, were never in the country at the material time that a purported resolution was passed to remove the petitioners as directors and also stated that the signatures on the said resolution had been fraudulently placed on the resolution.

Pursuant to the submissions made to the court, Judge Ruwan Fernando of the Commercial High Court, by his order dated May 15, 2018, granted orders restraining the purported new directors, Priya and Tara Matharu, from functioning as directors in terms of the Companies Act and a further other restraining the respondents from preventing the petitioners from functioning as directors of Global Grange Lanka.