No Dividend

June 18, 2007 (LBO) – Seylan Merchant Bank said it was unable to pay a dividend proposed earlier, following a solvency test specified in a new company law. The investment bank said in a stock exchange filing that shareholders who attended its annual general meeting last week had already been told that a 25 cent dividend mentioned in the annual could not be paid.

The new company law which came into effect in May has stricter rules on dividend payouts, but firms can engage in previously prohibited activities such as buying back shares or engaging in leveraged buyouts. The law also caused confusion over what was earlier known as ‘bonus’ shares.