The islands largest insurer Ceylinco Insurance has cut links to Lalith Kotelawala’s troubled group when firms controlled by him sold their stakes in the insurance firm last year.

“Most group companies held shares in Ceylinco Insurance and with the troubled times naturally they had to dispose their assets to honor commitments. So there has been a fair shift in shareholdings,” says R Renganathan a director at Ceylinco Insurance.

“Rough estimate of 15-20 percent,” says Renganathan in response to how much in Ceylinco Insurance shares were sold by Kotelawala controlled firms.

The Insurance firm’s life unit continues to be headed by R Renganathan while Ajith Gunewardena heads the general insurance unit. The two are also influential trustees in the employee, pension and gratuity trusts that now control Ceylinco Insurance with their controlling equity ownership.

“We are a separate company; we have to look after the interest of the shareholders and the policy holders. It doesn’t belong to anyone else. This is a public listed company,” says Ajith Gunewardena who is also a director on the main board.

However Lalith Kotelawala, who is out on bail over charges of misappropriation of depositor funds, continues to be Ceylinco Insurance chairman. He is also a member of the influential trustees that control a controlling stake in the firm.

In an interview Gunewardena refused to speculate it Kotelawala will stand for reelection as chairman, ”that’s up to the public because it’s a public listed company,” he said.

Kotelawala’s wife Scille Kotelawala, who is Deputy Chairperson of the firm, is absconding arrest over similar charges to those her husband is facing.

Few Ceylinco Insurance shares and held by individuals. The main board of Ceylinco insurance controls the ‘Ceylinco Insurance Employee Share Ownership Trust’ which owns 23 percent of the firm.

The employee gratuity trust fund and the pension fund control a further 13-pct. Firms controlled by Ceylinco subsidiaries which in turn own Ceylico insurance stakes and directors personal holdings account for the board controlling interest.

“There are two or three foreign funds that are controlling about 30 percent. They haven’t asked for board represented,” adds Gunewardena.

However because of the turmoil in Kotelawala controlled firms Ceylinco Insurance lost business.

“Out of the business we have lost (last year) around 60% came from Ceylinco companies,” says Gunewardena who adds that overall Ceylinco group accounted for around 3-pct of their revenue before the crisis.

“There is nothing to say that we were depending on them or they were depending on us. Bit I must say while this was a group firm we were supporting them.”

Ceylinco Insurance also said net profits for the December 2009 quarter rose 137 percent to 356 million rupees from a year earlier while full year profits rose 42 percent to 691.8 million rupees despite weaker premiums.