SEC blocks sale of Agalawatte Plantation shares in directive

July 20, 2016 (LBO) – Sri Lanka’s Securities and Exchange Commission (SEC) in a directive to Claridge Stockbrokers says the sales proceeds of 304 million rupees for 15.2 million shares of Agalawatte Plantations must be withheld pending an investigation.

Nirmalie Samaratunga and M. J. Varma had complained to the SEC that 60.8 percent of the shares in Agalawatte Plantations PLC held by Mackwoods Plantations Private Limited had been sold by Dr. Chrishantha Nonis, without due authorisation and without the approval of the shareholders of Mackwoods Plantations Private Limited.

“As you are aware, this transaction appears to fall under the category of a major transaction for which shareholder approval needs to be obtained prior to the sale being effected,” SEC said in a statement.

The SEC noted that the two persons authorised to issue instructions were Shelendra Ranaweera and Lalith Fonseka, but written instructions for the sale were issued by Chris Nonis.

“In light of the above, the SEC needs to verify whether Dr. Chrishantha Nonis is a duly authorized signatory” to issue trading instructions for and on behalf of Mackwoods Plantations Private Limited, the SEC said.

“The sale of shares without due authorisation of the owner of the said shares is a matter of grave concern to the SEC as it affects the credibility and integrity of the Securities Market.”

“Furthermore, the sale of shares in violation of the written instructions issued to you and contrary to a Directive issued by the SEC is a serious breach of discipline on your part and a matter on which the SEC takes very serious cognizance.”

“Your conduct is aggravated by the fact that Claridge Stockbrokers (Pvt) Ltd is a company in which Dr. Chrishantha Nonis has an interest.”

The SEC has directed the company to withhold the sale proceeds of the transaction until it is examined by the SEC.

Last week, LOLC Securities informed the Colombo Stock Exchange that their client Browns Power Holdings (Private) Limited had purchased 60.3 percent of Agalawatte Plantations PLC.

Browns Power Holdings purchased 15,200,000 Voting ordinary shares of Agalawatte Plantations PLC (AGAL.N.0000) on 14th July 2016 from Mackwood Plantations (Pvt) Ltd for 304 million rupees.