Minority shareholders in Confifi Holdings PLC (PALM) managed by Confifi Management Services Ltd are saying there have been blatant violations of the Takeover and Mergers Code, gazetted under the Securities and Exchange Commission (SEC) of Sri Lanka Act. A letter of complaint was sent to the SEC Director General by a minority shareholder, stating that on May 25, 2010, LOLC announced that its subsidiary LOLC Securities had acquired a 43.33% stake in PALM at Rs.210 per share. It was also announced by LOLC that a mandatory offer would be made in line with the provisions of the Takeover and Mergers Code.
Following the LOLC announcement, the share price of PALM which was around Rs.200 increased to Rs.327.50 and closed at Rs.313. A 39% stake in PALM was held by the founder chairman of the company, Professor M.T.A. Furkhan who had increased his shareholding to 41% in order to resist the takeover.
Subsequently, it was announced on June 3, 2010 that LOLC Securities purchased Professor Furkhan’s stake for Rs.210 per share and that a mandatory offer would be made to the remaining shareholders at Rs.210. However, minority stakeholders are arguing that it is unlikely Professor Furkhan would have sold his entire stake in PALM for Rs.210 when the price per share had gone up to Rs.327.50.
There has been no response from the SEC to the letter to date. Professor Furkhan, who was overseas when contacted by the Business Times on Friday, said he had no comment.