May 11, 2007 (LBO) – Chemanex, a listed chemical firm, has postponed a shareholder meeting called to ratify a bonus issue after a new company law came into effect earlier this month, the company said Friday. The company said the Stock Exchange had informed Chemanex that a ‘bonus issue’ declared by the board of directors before the new company law came into effect on May 03 could only be proceeded with if it does not conflict with several provisions in the new law.
“In the circumstances, until we obtain full clarification on the matter, we regret to inform you that the Extraordinary General Meeting is postponed to a later date,” the firm told the Colombo Stock Exchange.
Under Sri Lanka’s new law ‘bonus’ issues where new shares are issued with a ‘par value’ is no longer recognized.
Instead shares have to be split.
Legal experts have said that board resolutions on bonuses that have not been ratified by shareholders before May 03 cannot be proceeded with under the new law.