July 16, 2007 (LBO) – A Sri Lankan court has convicted four executive directors of a listed company that went bust some years ago for not revealing information that affected the firm’s share price. The present SEC administration has made it clear that it would not allow compounding of offences with the provision that it is not an admission of guilt.
Market analysts say this was the first time the accused in a securities-related offence has been convicted under the Securities and Exchange Commission (SEC) Act.
Four directors of Magpek Exports Ltd. against whom the judgement was delivered by the Fort Magistrate’s court Friday, are expected to appeal.
The directors are Kumar Boralessa (CEO), Ajantha Mylvaganam, Ana Madonza and Mohan Alles.
Sentencing is on August 2.
Three non-executive directors of the firm, Magpek Exports Ltd., had their offences compounded at their request by the markets regulator, Securities and Exchange Commission (SEC).
The compounding was based on the condition that the chairman of the company turns state witness.
Magpek was liquidated about one and a half years after it raised 280 million rupees in an initial public offering. Many investors lost