Share repurchase agreements, currently under fire for their lack of clarity, will required shareholder approval under new Colombo Stock Exchange (CSE) listing rules, according to the CSE.
"We will bring in provisions for shareholder approval with regard to share repurchases," Surekha Sellahewa, CEO CSE told The Sunday Times FT.
She explained that the new CSE rule will be that share repurchases will be on a pro-rata basis (like the recent one that John Keells Holdings (JKH) announced). "In order to ensure shareholder democracy a share repurchase will only be on a pro-rata basis, granting all shareholders the opportunity of selling their shares to the company," she added. JKH decided to re-purchase 25.5 million of its ordinary shares at Rs. 90 each on a pro rata basis of one share for every 25 shares held.
Mrs. Sellahewa said the new set of rules have just been sanctioned by the CSE board and sent to the Securities and Exchange Commission (SEC) for approval. (DEC)