Financial Times

Spence issue over The Sunday Times FT article
Julius and Creasy, lawyers for the Aitken Spence Group, has sent a letter complaining of inaccuracies in The Sunday Times FT story on March 5 headlined “New Spence shareholder challenges Harry J”. The letter said:

The said article contains many misinterpretations and incorrect/inaccurate facts that had misled the public and created an erroneous perception in respect of the transactions under reference, and of our client.

The article incorrectly states that “Aitken Spence, a quoted company had amended an article in its Memorandum and Articles at an extra ordinary general meeting adopting a special resolution to sell 25 percent shares and grant 50 per cent voting rights to the German based TUI Group”.

This is a misinterpretation as Aitken Spence & Co Ltd. (the quoted company) did not amend any of their articles at an Extra Ordinary General Meeting for this purpose as stated in the said article under reference nor transferred any of their shares to a German company TUI AG.

The purported amendments cited in the said article relate to Aitken Spence Travels Limited (which is not a quoted company) which adopted a new set of Articles in order to facilitate the sale of shares in that company to a German company TUI AG.

The procedure followed for the adoption of the new set of Articles was well within the Company rules and regulations and according to the prevalent laws. Furthermore, none of the shares of Aitken Spence & Co. Ltd. was transferred or affected by this sale as incorrectly and wrongly referred to in the said article.

The said Article also raises concerns regarding the legality of giving 50 %oting rights to TUI AG and inaccurately suggests that a foreign firm or entity cannot buy more than 40% of shares in a local company. However, in terms of the regulations made under the Exchange Control Act, a foreign firm and entity can buy over 40% of shares in a local company with the approval of the Board of Investment, as was done in this case. Approval of the Board of Investment was duly sought and obtained for this share transaction, which was in respect of Aitken Spence Travels Limited.

Furthermore, the concerns raised in the said article under reference in respect for the validity of the capital transaction are without any valid foundation or basis.

We wish to categorically state that the capital payment for the share transfer was made in foreign exchange and the funds were remitted to Sri Lanka through the proper channels and permission was granted by the Central Bank of Sri Lanka to issue the shares to TUI AG.

This transaction has immense commercial and financial advantages to the Aitken Spence Group and is of great benefit to our country as it reflects the commitment of TUI AG, the largest integrated travel company in the world, to the growth and development of the tourism industry in Sri Lanka.

Deshamanya Harry Jayawardena is the chairman of Aitken Spence & Company Limited and our clients are unaware of any challenge made against him in respect of this transaction by any shareholder.

Business Editor says: We erroneously referred to Aitken Spence in the third paragraph of the story when it should have been Aitken Spence Travels Ltd as referred to in the first paragraph in the story. The contents of the story are based on a letter sent to the Securities and Exchange Commission (SEC) by Mr S.M. Shukrie of Maradana, a shareholder at Aitken Spence.
The SEC says they are looking into the allegations.

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