Indulakshin Wickremasinghe Senanayake vs Dr. Renatus Diederich Gebhard Wilhelm Koehn – SC/CHC/APPEAL NO: 34/2002-2025

The court addressed the validity of allotments of shares and the purported increase in the authorized share capital of the 1st Respondent company. It was held that the actions of the respondents—in particular, the dilution of the petitioner’s shareholding—were oppressive and in breach of statutory and constitutional shareholder rights. The principle reaffirmed was that directors and majority shareholders are bound to adhere to proper statutory procedures and cannot unilaterally alter shareholding to the detriment of a minority shareholder. This decision relied on relevant provisions of the Companies Act and precedent relating to oppressive conduct, underscoring that failure to observe lawful procedures for capital increase and allotments can render such corporate actions invalid and void,