Section 8.1 under which the CNLD disclosure was made refers to ‘Immediate disclosure of price sensitive information’. It says that a listed entity shall make immediate disclosure of price sensitive information to the CSE in order to ensure the maintenance of a fair and orderly securities market. 8.2 (b) refers to the ‘Content of Announcement’. [...]

The Sundaytimes Sri Lanka

Disclosure provisions of CSE rules

View(s):

Section 8.1 under which the CNLD disclosure was made refers to ‘Immediate disclosure of price sensitive information’.
It says that a listed entity shall make immediate disclosure of price sensitive information to the CSE in order to ensure the maintenance of a fair and orderly securities market.

8.2 (b) refers to the ‘Content of Announcement’. It says that each announcement shall:-

(i) be balanced and fair, be factual, clear and concise;

(ii) avoid over-technical language, and should be expressed to the extent possible in language comprehensible to the layman;

(iii) contain sufficient quantitative information to allow investors to evaluate its relative importance to the activities of the Entity.
Thus, the announcement should avoid:-

- omission of important unfavourable facts, or the slighting of such facts;

- presentation of favourable possibilities as certain, or as more probable than is actually the case;

- presentation of projections without sufficient qualification or without sufficient factual basis;

(iv) avoid negative statements phrased to create a positive implication;

(v) avoid the use of promotional jargon calculated to excite rather than to inform; and

(vi) explain the consequences or effects of the information on the Entity’s future prospects. If the consequences or effects cannot be assessed, explain why.

The ‘content of information’ provision raises many questions in the light of Dr Godahewa’s argument that the construction of a tourist hotel may or may not happen.

Was the information disclosed to the CSE balanced, fair, factual, clear and concise as per listing rules?

Who will bell the cat when the judge, jury and executioner are one and the same authority? We leave it to our readers to decide on whether the spirit of the Tourism Act was violated, which in legal terms is a violation itself.




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