Hundreds of employees of the Commercial Bank of Ceylon (CBC) yesterday held a protest demonstration and meeting against moves by the majority shareholders of the bank to take control of what has been often described as the country`s best privately-owned bank.
These employees mustered outside the Commercial Bank`s Union Place branch and walked up to the CMU headquarters at Kollupitiya where they held a meeting.
`We are not concerned with personalities,`` M.R. Shah, the President of the Ceylon Bank Employees Union, told this reporter before the meeting. `We are neither for nor against Harry Jayawardena or Mahendra Amarasuriya. What we demand is that the Banking Act be implemented in letter and spirit.``
He added that nobody was above the law nor should anybody be victimized due to anybody`s overpowering shareholding.
Shah said that although yesterday`s protest only involved employees of the Commercial Bank, the 25,000-strong Ceylon Bank Employees Union will also come into the fray `shortly.``
He alleged that Mr. Harry Jayawardena and his nominees were using the strength of their shares to ruin the Commercial Bank. If they succeed in removing Amarasuriya `without any reason whatsoever,`` it would affect the whole banking industry and consequently hurt the national economy.
`He (Amarasuriya) has done no wrong and there is no reason to remove him,`` Shah said.
The Banking Act was clear in that it limited the ceiling on shares that could be held by a single individual or entity and their nominees. A 10% limit had been fixed and unless specifically exempted by the Monetary Board (as was the case with the DFCC Bank`s shareholding of CBC) that limit cannot be exceeded.
The requisition of an Extraordinary General Meeting of the Commercial Bank to remove Amarasuriya had been made by the Distilleries Company of Sri Lanka and the Sri Lanka Insurance Corporation (SLIC), both significant shareholders of CBC, controlled by Jayawardena.
The same two companies have given special notice resolution to remove Amarasuriya.
SLIC and Distilleries, together with the DFCC Bank (which some weeks ago demanded Amarasuriya`s resignation from that bank) have over 50% of CBC`s shares with the DFCC owning 29.77% of CBC being its biggest shareholder.
Shah said that the bank union had made representations to both the Governor of the Central Bank and the Monetary Board asking that the Banking Act be enforced in letter and spirit. But the Central Bank`s response has been `very weak,`` and the only response they have got was that the matter was being `looked into.``
`Some of Central Bank regulators refused to meet us for a discussion,`` Shah said. Without naming anybody, he said that a senior regulator had asked the union to protest publicly in order to strengthen their muscle to implement the Banking Act.
He argued that it was the Central Bank`s duty to protect the interest of depositors who own 95% of the bank`s funds and not only those of shareholders with 5%. However the Central Bank had got its roles mixed up.
`It has now become the union`s duty to teach the Central Bank what its role is under the Banking Act,`` he said.
CBC employees belonging to the CBEU, the Association of Commercial Bank Executives and Commercial Bank Staff Association participated in yesterday`s protest.
In a statement responding to a newspaper report on the planned protest yesterday, SLIC accused some `interested parties`` at the Commercial Bank of trying to mislead employees saying that this was an attempt to consolidate or merge CBC (with some other entities) and employees jobs were in danger.
`There is no intention on our part to support a merger or consolidation of the Commercial Bank. We also see no threats to the security of jobs of Commercial Bank employees. Furthermore, to the best of our knowledge no shareholder of Commercial Bank has violated the Banking Act or any other law of the land,`` the SLIC statement said.