RPC free share issue

Richard Peiris and Company Plc (RPC) has announced a cash dividend to shareholders, becoming the first company to do so after the new Companies’ Act came into effect on May 3.

The new Act had defined bonus share issue in such a way that listed firms were perplexed, amongst different legal opinions and points of view.

Many firms, who have announced bonuses but not ratified them from their shareholders stopped the bonuses until ‘the legal position was clarified’. “RPC distributed out of their retained earnings, while capitalizing a part of it into the stated capital,” a senior RPC official said.

A senior accountant said that RPC has decided that the fair value for a RPC share is Rs.40. “They are calling it a ‘free share issue’ and not a bonus,” he explained.