By Sarah Hannan The once exclusive and principally constituted Nuwara Eliya Golf Club (NEGC) that was steeped in colonial traditions has allegedly been taken over by personnel who have little to no regard for such deep-seated traditions and constitutions which were followed for generations. A handful of NEGC members recently shared an incident that has led to the unearthing of the misuse of the club’s monies and breaking of a clause of the club’s rules and conditions to acquire movable assets/add new improvements to the club, which had cost sums in excess of Rs. 500,000. As the members pointed out verbally, as well as through two written notices, capital expenditure of Rs. 40.8 million and Rs. 7.037 million, respectively, had been borne by the club in 2019 without approval being obtained by NEGC members during a special general meeting. According to NEGC member Priath Fernando’s email and a Letter of Demand issued by Ranjan Gooneratne on 14 September, the NEGC Executive Committee had contradicted Rule 2 (e) of the rules and conditions of the club. “To consider and retrospectively approve and adopt the following resolutions in respect of capital expenditure for new items of improvement to the fixed assets of the club in terms of RULE 2(e) of the Rules and Conditions of the Club,” the letters read. As pointed out and quoted by both members in their letters, Rule 2 (e) dictates that “the General Committee shall not be empowered to incur expenditure, nor raise liabilities by any other method, of sum in excess of five hundred thousand rupees to meet the overall completed cost of any new item of improvement to the fixed and/or movable assets of the club, other than for the replacement of, but not the increase in quantity of any existing assets of the club, without having first obtained the approval of the members in a special general meeting (SGM)”. In his email, Fernando has further stated: “There is a grave danger to the membership that using the retrospective option to seek approval from the membership in this instance sets a bad precedent that could be used by future committees to completely disregard the need for accountability and responsibility. This point needs to be taken very seriously.” It was further elaborated that this fundamental mistake was brought up at the annual general meeting (AGM) held on 15 August 2020 and after some feeble attempts at justification, the meeting had been adjourned. The members had noted that the minutes of the adjourned AGM have not been circulated with the Notice of the SGM. Referring to Rule 2 (e), Fernando has also noted that he, after consulting legal opinion, became aware that the Notice of the NEGC SGM, which he received and which requests the members “to consider and retrospectively approve and adopt the following resolutions in respect of capital expenditure for new items of improvement to the fixed assets of the club in terms of RULE 2(e) of the Rules and Conditions of the Club”, had clearly violated Rule 2 (e). Therefore, the proposed resolutions to “retrospectively” approve capital expenditure already incurred in excess of Rs. 500,000 were undoubtedly not in compliance with the rules of the NEGC. Meanwhile, NEGC member Gooneratne, in his Letter of Demand, has spelled out the project for which money had been used to acquire land to construct the proposed 12 new rooms, adding that no money can be spent as stated in Rule 2 (e) and therefore, such money cannot be approved under Rule 2 (e) retrospectively. Gooneratne had further noted that calling for a SGM after spending an unauthorised sum of Rs. 25,147,121, as declared in the SGM Notice itself, is proof that Rule 2(e) has been violated and the purpose of the said SGM is illegal. Gooneratne has remarked that being present at the AGM held on 15 August 2020, which was adjourned sine die as a SGM was not held to obtain the sanction of the membership to approve expenditure to be incurred in the construction of the proposed 12 new rooms, confirmed that the minutes of 25 May 2019 presented for confirmation at the AGM were not in order. Non-compliance by ExCo A movement named the Nuwara Eliya Golf Club Defenders was formed following the incident. Dian Abeyewardene, a member of the movement, spoke to The Sunday Morning to give insights into the current situation of the club. “The backlash the members are now facing, following the outing of the non-compliance by the Executive Committee, has reached an extent where they are receiving death threats. I myself have lodged a complaint with the Nuwara Eliya Police, alerting that my life is in danger. Moreover, when I wanted to lodge a complaint against the financial fraud that is taking place, the Nuwara Eliya Police said that I should hand over the case to the Criminal Investigation Department (CID) as the sum was quite considerable.” According to Abeyewardene:

• If a lease agreement is to be signed, three committee members would be appointed to represent the NEGC to sign the lease agreement
• If any addition or extension or improvement of the club, or improvement of the assets that needs to be done in the NEGC that would exceed a sum of Rs. 500,000, shall not be approved by the committee without the approval of the general membership that should be obtained during a SGM
• The term of the committee is one year and the AGM has to be held before 30 April of every year

Abeyewardene explained that a SGM is convened to pass a budget or capital expenditure that is marked over Rs. 500,000. Furthermore, due to the Easter Sunday attacks, the AGM for the year 2019 had not convened before 30 April and had been later held on 25 May 2019. “The office bearers were appointed during the 25 August 2019 AGM, and in the agenda of the AGM, they had craftily placed the proposal of the construction of the 12 new rooms for the NEGC. They wanted the House to approve the said plan and the budget during the AGM. The move was opposed by several members, noting that it was not a matter that should be discussed or sought approval for at an AGM and referred to Clause 2 (e).” The members had corrected them, noting that this needs to be brought up at a SGM. Angered Treasurer Sudath Kumara had allegedly barked that they only need the votes of approval for the conceptual plan and not for the money. Afterwards, the House had given their approval for the conceptual plan. However, another member had cross-questioned the decision of spending millions just after the Easter Sunday attacks and had pointed out that it is untimely to discuss such capital expenditure the club is to incur at a crucial time, without even having the assurance that the members would renew their memberships, given the unsafe and unstable economic backdrop of the country at the time. “Their explanation to take such a decision at a crucial time was that there are insufficient accommodation spaces for the NEGC and that when members come from Colombo, they do not have lodging facilities at the club. Therefore, they wanted to go ahead with the construction.” Another member had then pointed out that such a construction cannot take place on land the club does not own outright, which is on leasehold without three committee members signing the lease agreement, to which the Treasurer had later nodded in agreement. Abeyewardene then revealed that after the lapse of a year, the minutes of the meeting were circulated for the next AGM. Since 25 May 2019 and 30 April 2020, there has not been any communication over the construction or the status of the conceptual plan. During the Covid-19 lockdown, the office bearers of the NEGC had circulated a newspaper advertisement stating that the terms of the office bearers were to be extended to 15 August 2020. “On 1 August, I was sent a WhatsApp message from the Vice President, indicating that the NEGC needed my proxy for the AGM on 15 August 2020. Over the next two days, I received the minutes for the previous year’s AGM that was held on 25 May 2019 and proxy through courier, which I opened and observed. It is only when there is an election of office bearers that I say I cannot attend or send anyone in my proxy to vote.” AGM 2020 Abeyewardene explained to The Sunday Morning that he could not go to Nuwara Eliya for two AGMs: In 2018, he had been after a heart surgery and had to rest, and 2019, following the Easter Sunday attacks, he had not been able to travel to Nuwara Eliya. “The AGM minutes should ideally have a record of the day’s proceedings and has to be proposed and seconded by two people who were physically present at the AGM. I was in no capacity to confirm the minutes as I did not attend the AGM in 2019.” Nevertheless, this year, Abeyewardene had made it to the AGM that was held on 15 August 2020 in the company of the President of the Royal Colombo Golf Club (RCGC). “I walked in 10 minutes after the proceedings had commenced – that was at 6.10 p.m. The agenda for the AGM was on display on a widescreen and the House had stopped at the confirmation of minutes for the AGM that was held in 2019. It was during this time that member of the NEGC and Attorney-at-Law Ranjan Gooneratne brought out the violation of Rule 2 (e) as the NEGC office bearers had gone ahead and started the construction of the 12 new rooms within the period of May 2019 and April 2020.” Abeyewardene also pointed out that the members were unaware of the capital expenditure incurred to acquire land to build the new rooms, and even in the 2019 Annual Report, the expenses had not been reflected on the main balance sheet but had been added as a footnote in small lettering. “They had also not circulated the Annual Report on print but had sent it to all the members on a compact disc (CD), which I did not access. Therefore, I demanded a print copy that was made available during the AGM, which one of the office bearers refused to share in order to purposely hide the fact that funds had been used without proper approvals to acquire land and build the facilities that were agreed on, for which a budget was not approved.” While only one member of the NEGC who resided in Nuwara Eliya was aware of the financial misappropriation that was taking place, that member had remained silent throughout the AGM. The member had been helpless as the other office bearers continued to violate the club’s constitution. Abeyewardene and a few other members of the NEGC have now sought legal counsel and filed cases with the CID, requesting to hold investigations and for a forensic audit over the club’s financial records for the year 2019-2020, during which time this misappropriation had taken place. Moreover, they have also requested to investigate the named office bearers who have spent millions of rupees from the club’s funds to make cash purchases and lease payments for assets that were illegally acquired during their time in office as well as for misleading the members to approve their plans and meeting minutes through proxy. Misunderstanding company by-laws Providing the right of reply, The Sunday Morning contacted one of the standing committee members, who under condition of anonymity, said: “The office bearers holding office for year 2019-2020 of the NEGC decided to go ahead with the construction of the 12 new rooms that would improve the accommodation facilities at the club in good faith. Abeyewardene’s unfounded allegation against us and him convincing certain members to side with him has given rise to unnecessary dispute among the club members.” The committee member said that Abeyewardene had no reason to complain to the Nuwara Eliya Police Station or to obtain a stay order against the committee from convening a SGM from the District Court, which also extended to stop the committee from functioning. “The stay order was taken to bar the committee from tabling the capital expenditure the NEGC has incurred, which was to be retrospectively approved. However, the judge had later declined to issue the stay order. We are yet to be served summons, should the case be heard. We are yet to see the judge’s orders, as he has gone ex parte requesting investigations over the reports and to obtain a court order.” At the time he noted that since the committee was not issued summons and the committee learned that the judge had declined to issue a stay order, the SGM is to convene on Saturday (yesterday, 19). The legal counsel for the committee has now advised the committee members to convene the SGM and also to proceed with tabling the capital expenditure that was incurred, which is to be retrospectively approved. The conceptual drawings of the plan and the projected expenditure had been presented at the 2018 AGM when the budget for the year was presented, and during that AGM, two other items were also included: The capital expenditure that would have to be incurred for the construction of the 12 new rooms and the capital expenditure for the sewage treatment plant that is to be installed at the premises. Then when the Notice for the 2019 AGM was circulated, there were 12 agenda items, out of which items 10 and 11 were capital expenditures for the construction of the 12 new rooms and the installation of a sewage treatment plant. While these agenda items were read out loud at the 2019 AGM on 25 May, one of the members stood up to say that it was an excellent idea as the addition of the new rooms was very much welcomed, and said that the committee will have to convene over a SGM to get the capital expenditure approved. However, since this was discussed at the AGM, it was noted that they did not see a need for them to come back for a SGM. The legal counsel had previously advised the office bearers that since an AGM supersedes a SGM, items that are to be discussed at a SGM can be presented at an AGM, so that the general membership is also aware. “We had received all the necessary approvals to continue the construction work form the Nuwara Eliya Municipality. The lease agreement on the land that we were to build the new rooms and the sewage treatment plant was expiring, so we had to renew the leasehold and start the construction in 2019.” As the time for the 2020 AGM arrived, which the NEGC had to delay due to the travel restrictions imposed due to the Covid-19 lockdown, the AGM was eventually held on 15 August 2020. When the minutes of the 2019 AGM were read out and the confirmation of the minutes was proposed, the issue was raised over the capital expenditure for the 12 new rooms that were constructed, which was passed without holding a SGM. Amidst objections, the matter had been taken up for discussion at the AGM and the AGM was adjourned, so that a SGM could be called to get the committee to convene and the budgets that were spent to be discussed. “At the time, it was the sensible thing to do as there was a bit of an agitation by a couple of members who thought the SGM was necessary. At that point, there was no legal counsel for the committee present, and the committee decided to put the decision to a vote, which was a mistake made on the officer bearers’ and the committee’s part.” After this, the AGM had been adjourned to schedule a SGM.