Thursday 25 December 2014

Pelwatte Sugar under liquidation

Sri Lanka's first Colombo Stock Exchange- listed sugar growing and manufacturing company Pelwatte Sugar Industries PLC is under liquidation.SJMS, Joint Liquidators, in a filing to the Colombo Stock Exchange dated December 18, 2004, under the topic Commercial High Court of Western Province Colombo Case No: HC (Civil) 46/2012/CO said: We refer to your letter dated 05-12-2014 and the discussion your officers had with us previously regarding the above company and wish to confirm you that the above said company is presently under winding-up as per the order made by the above said Court with effect from 12-03-2013. A certified copy of the said Court Order is sent herewith as requested.

Under present status of the liquidation of the company, SJMS has told the CSE:


a. Vesting of company assets in the State:
The leasehold land obtained by the company from the State was vested in the State with effect from 11.11.2011 under the provisions of Revival of Under performing Enterprises or Under-utilized Assets Act No. 43 of 2011. However, as per the information furnished by the former management of the company the Competent Authority (CA) appointed under the said Act has taken over the entire assets of the company and its business operations, prior to the winding up order was made by the Court. The inventory of the assets taken over by the State has not yet been furnished to us by the CA.

Since most of the assets of the Company and its business operations were not vested in the State under the said Act, we have requested the Competent Authority – the Secretary of the Ministry of Sugar Industries, to provide us the inventory of the assets vested in the State under the provisions of the said Act and to handover the balance assets not vested in the State, to us. We have not received any response in this regard up to date from the Competent Authority, despite several reminders.


b. Claim submitted to the Compensation Tribunal:
Liquidators have submitted their claim for compensation on behalf of the Company under Liquidation, the Compensation Tribunal appointed under said Act. The claim was based on the market value of the company shares and the creditors' liability of the company as at the relevant date, as the entire assets of the company and its business operations were taken over by the competent authority.

However, the tribunal was of the view that they have no mandate to assess the compensation as claimed by the liquidators since what was vested under the said Act was only the leasehold land held by the company.

Under these circumstances, the Liquidators have requested the Chairman of the Compensation Tribunal to refer the matter to the Attorney General and seek his advice in this regard.

Even though a Meeting in this regard was convened by the AG's Department in April 2014, unfortunately it was postponed indefinitely.

c. Creditors & Shareholders Claims received by Liquidators:
Consequent to the publication of Notices of winding up of the Company and our appointment as the liquidators, number of Creditors and shareholders of the Company have submitted their claim against the Company to us.

Any shareholder of creditor of the company who has not yet submitted his or her claim could submit his/her claim to the liquidators.


However, the settlement of the claims will be made in accordance with the provisions of the Companies Act No. 07 of 2007 depending on the amount of compensation to be awarded by the compensation tribunal.

All these matters have been reported by us to the winding up court regularly, SJMS has told the Colombo Stock Exchange.
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