Sri Lanka’s Securities and Exchange Commission (SEC), which was collecting facts about the investments and dealings of Environment Resources Investments – ERI (formerly Walker & Greg) to verify whether there has been any market manipulation when its shares were traded during last year, has yet not concluded its probe on this company, according to informed sources.
The SEC was having some concerns about their disclosures pertaining to ERI’s (foreign) investment in South Africa, but since the company made an announcement (this week) saying that they sold this firm and made a capital gain, speculation in the share market was that the SEC may have abandoned its probe, which has been ongoing for about a year.
“This is not correct as there are still enquiries by investors on ERI, with regard to its nature of business, etc. What they've provided so far needs some more substantiation," a source told the Business Times.
ERI was restructured to become an investment holding company after Lionhart Investments Limited of UK, took over control (93.8%) from Browns Group in 2007 when it was called Walker and Greg. In 2009, it bought a platinum mine through Environmental Resources Limited incorporated in British Virgin Islands. This firm, (which had 24 million shares of Eastern Platinum) sold the platinum mine realizing a capital gain of CA$ 41.3 million (equaling Rs 4.5 billion), a company announcement to the Colombo Stock Exchange said.
Despite this capital gain ERI’s share price suffered about Rs 20 drop during the first four days this week. ERI shares and its warrants together with connected companies were the main market movers during the last year, which also resulted in the regulators halting trading on the warrants for two days and subsequently imposing the controversial price curb rule across the board to all stocks.