A public interest activist has complained to the Securities & Exchange Commission (SEC) of attempts to persuade depositors of a failed finance company to convert their deposits to shares.
In a letter to SEC Director General Malik Cader, former Chamber of Commerce Chamber Chandra Jayaratne has said depositors of Standard Credit Lanka Ltd have been persuaded to sign the consent forms in regard to the conversion of the outstanding dues on deposits with the aforesaid failed finance company, into non voting shares and deposit and Promissory notes carrying a lower rate of return, based on a restructuring plan purportedly approved by the Monetary Board of Sri Lanka, which is said to include a merger of Standard Credit Lanka Limited with Multi Finance Company Ltd and the listing of the Multi Finance Company Ltd by way of an introduction, allowing former depositors to trade in their non voting shares and recover their former deposits’. Mr Jayaratne said Multi Finance Company Ltd in a letter to depositors has drawn attention to a website for corporate information.
“Unfortunately the depositors concerned lack the capability to access the information available on the site and form an independent professional opinion of the company, its parent company and predecessors in business, nor the information available in the introductory document available to be downloaded, including its business structure, corporate structure, organization, management, operating results and especially the audited accounts and the audit opinions contained in the document,” he said.
The depositors have not received a copy of the consent form they executed nor have they yet been issued with the relevant share certificates and the relevant Promissory notes. They are also unaware of when the non voting shares will be listed and when trading will be possible nor the basis of conversion of the portion of the original deposit to be converted into non voting shares, including the face value of the shares to be so issued, he said.
He appealed to the SEC to kindly enlighten, by a series of public communications and advertisements, the depositors of failed finance companies, primary dealers and other deposit institutions now subject to restructure involving listing of shares in the Colombo Stock Exchange. These communications should include the steps taken by the Monetary Board and the SEC or planned to be taken in the near future to safeguard the interests of the depositors and the processes of due validations including independent professional opinions and compliance built in to the approval of the restructure plans and listings, he said.