Constant Default Board entrees to be delisted from CSE
Sri Lanka’s capital market regulators are to take action against publicly listed firms that have a lackadaisical attitude towards rules and regulations.
The Colombo Stock Exchange (CSE) and the Securities and Exchange Commission (SEC) are mulling to strike off/delist errant firms that constantly enter the default board of the CSE, informed sources say.
Most firms enter the Default Board owing to non submission of annual or interim accounts. “The SEC wants to de list these companies who repeatedly offend and get onto the Default Board,” a source told the Business Times. He said that they’re mulling delisting those that enter this board consecutively for three years.
In 2013, 17 companies were transferred to the Default Board with effect from September that year due to Non-Submission of Annual Report 2012/2013.
They were Asia Capital, The Autodrome, Ceylon & Foreign Trades, Central Investments & Finance, C T Holdings, East West Properties, Huejay International Investments, PC House, People’s Merchant Finance, Radiant Gems International, Standard Capital, Asia Asset Finance, Orient Garments, PC Pharma, PCH Holdings, Ramboda Falls and Tess Agro.
Anilana Hotel and properties, Tess Agro Swadeshi Industrial works and East West Properties were transferred last week.
The Asian Development Bank (ADB) with which the government entered into an agreement last year for a loan of US$250 million from the Ordinary Capital Resources Fund of the Bank to implement the Capital Market Development Programme (CMDP) has also strongly advocated this decision, he added.
Under the CMDP it is desired to develop efficient, stable and transparent capital markets that are a highly proficient conduit for resource mobilsation and that are grounded in a strong legal and regulatory framework. Increasing the capacity and size of the capital market through enhanced market facilitation, demand measures and supply measures are also identified as objectives of the CMDP. The ADB is pushing toward s progressive proposals.
The proposed loan by ADB will be disbursed in two tranches of approximately $125 million each, based on the accomplishment of the policy actions relevant for each of the tranches. The Ministry of Finance will be the executive agency of the programme whereas Central Bank, SEC, Sri Lanka Insurance Board and Sri Lanka Accounting and Auditing Standards Monitoring Board will be the implementing agencies.