Sentenced

Sept 07, 2007 (LBO) – A Sri Lankan court Friday sentenced four directors of an export company that went bust several years ago to jail and imposed fines in the country’s first ever securities fraud conviction. They were charged with non-disclosure of material information of a price-sensitive nature.

Colombo’s Fort Magistrate’s court sentenced the four directors of Magpek Exports to three years rigorous imprisonment on two counts and fined each five million rupees.

The judge did not suspend the sentences.

The Magpek directors are Kumar Boralessa (CEO), Ajantha Mylvaganam, Ana Madonza and Mohan Alles.

They are expected to appeal the sentences.

The case against directors of Magpek Exports was the first-ever conviction of an offence under the island’s capital markets regulations, Securities and Exchange Commission (SEC) Act.

Four non-executive directors of Magpek Exports had their offences compounded at their request by the markets regulator.

The compounding was based on the condition that the chairman of the company turns crown witness.

Magpek was liquidated about one and a half years after it raised 280 million rupees in an initial public offering. Many investors