Alumex announces basis of IPO allotment

Alumex Ltd. on Friday announced the basis of allotment for its initial public offering of 59.9 million Ordinary Voting Shares at Rs. 14 per share.

The Rs. 838 million worth IPO drew 840 applications requesting 69 million shares worth Rs. 966 million. There was heavy retail interest for the IPO.

The basis of allocation is as follows:

Public Category
Retail Individual Investor Category: 100% of shares applied
Unit Trust Investor Category: 100% of shares applied
Non-retail Investor Category: 100% of shares applied

Non Public
Applications up to and inclusive of 2.0 m shares: 100% of shares applied
Applications above 2.0 m shares and up to and inclusive of 5.0 m shares: 2.0 m shares plus 20% of shares applied over and above 2.0 m shares
Applications above 5.0 m shares and up to and inclusive of 10.0 m shares: 2.5 m shares plus 34% of shares applied over and above 2.5 m shares
Applications above 10.0 m shares and up to and inclusive of 15.0 m shares: 6.0 m shares plus 40% of shares applied over and above 6.0 m shares
Applications over 15.0 m shares: 10.0 m shares plus 47.196% of the shares applied over and above 10.0 m shares.
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Financial sector consolidation a blessing?

- Randstad SL CEO says Fortune 500 companies will drive local eco system forward

By Hiyal Biyagamage

Ceylon FT: The much hyped topic of consolidation process aimed at reducing by half the number of finance companies in Sri Lanka can be viewed as a blessing in disguise, an HR expert from India told Ceylon FT.

Randstad India and Sri Lanka Chief Executive Officer, Moorthy K. Uppaluri said that if a situation arises where consolidation results in job redundancy; individuals and organizations should be thoughtful in terms of planning the next step and looking at translatability, not the skills. He suggested that the job surplus could be transferred into other industries of the country where the demand is high.

"One could look at the consolidation process as a disguised blessing. Say that you are a front officer in a bank and in the consolidation process; you lose your bank job. Imagine that the country's hospitality sector is red hot and screams for more talent. Is not there a chance with all your experience as a front officer that you could join the hospitality sector as a front officer?

There is some change in your left pocket and the right pocket is empty so you need to shift some change into your right pocket from the left pocket. So from one industry where there is a surplus of talent or a redundancy of talent that is created because of consolidation; one needs to map their skills and should look at how we can streamline those jobs which are becoming redundant and talents into some of the demands. It is always mapping supply to the demand and the willingness of these individuals to pick up new skills."

"I guess every problem comes with an opportunity. Half glass full and half glass empty you might say.

It is very difficult for the consolidation scenarios that some skills and talents will be redundant and it is very important for both individuals and organizations to be thoughtful in terms of planning the next step and looking at translatability, not the skills," opined Moorthy. When asked about the impact which can be created for the country's economy by establishing Fortune 500 companies, Moorthy said their financial strength would accelerate the local economy.

"It would help Sri Lanka in a big way. These companies bring in global learning, processes, commitment and technology and with their financial strength and global experience; they can help accelerate the growth of the local economy in a big way. May it be a global IT player or a telecom giant; their experience and strength will be very valuable," Moorthy said.

When questioned whether he was suggesting that more Fortune 500 companies should be in the country, Moorthy said, "Not only. They can come here and they should help carry the local eco system with them. It is not just bringing foreign companies to Sri Lanka. The local eco system is very important and it has to be vibrant. But I think these big companies can infuse the foreign investments that are coming in and it will boost the economy. When they rely on the local eco system for their supply purposes; it comes up gradually. So it is just not Fortune 500 companies coming to Sri Lanka and making money and selling their services, but they will help the local economy to grow."
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Stock exchange gets new COO

Renuke Wijayawardhane has been appointed Chief Operations Officer (COO) of the Colombo Stock Exchange, with effect from March 1, 2014.

Under the new strategic direction of the CSE Wijayawardhane will oversee the operations of the Trading and Market Surveillance Division, Listings and Corporate Affairs Division, Broker Supervision Division and Central Depository Systems (Pvt.) Ltd. (CDS), which is a fully-owned subsidiary of the CSE. He was formerly the Assistant General Manager of Regulatory Affairs.

Wijayawardhane is an Attorney-at-Law with an LL.B (Hon.) degree from the University of Colombo and counts over 20 years' experience at the CSE in a variety of operational areas.

The CSE intends on embarking on a comprehensive and aggressive market expansion strategy which will enhance broker capabilities and provide a robust listing environment. Wijayawardhane will direct these extensions within the scope of his new role.
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Touchwood depositors band together for legal action

Amidst a series of regulatory actions, troubled forestry firm Touchwood’s woes are slated to escalate with some depositors banding together to seek justice, some depositors said.

“We are taking legal advice in this regard,” one depositor told the Business Times. He added that they want more depositors of Touchwood to join them.

Amongst those directors who were issued notice of action by the Securities & Exchange Commission (SEC) recently, the controversial Parliamentarian, Duminda Silva’s name may have also figured, according to depositors. He resigned from Touchwood Investments PLC directorate a day after he was appointed.

According to Section 51, Sub Section 3 of the SEC Act, all directors who were on the board during a particular time an offence was committed are all liable for action.

According to Lanka Kiwlegedara, CEO of the company, 19 directors (past and present) were issued notice by the regulator. “Asitha Koralage, Laxman Kulatunga, Pradeep Herath, Jeffrey Ebert, Channa Abeygunawardena, Roscoe and Swarna Maloney and Janath Olaboduwa are amongst the directors who were issued notices by the SEC,” he told the Business Times. He didn’t mention Mr. Silva’s name.

The Colombo Stock Exchange (CSE) on Tuesday suspended trading in Touchwood Investment Plc on a directive by the SEC and this is the third occasion it has been suspended.

CSE transferred the securities of Touchwood Investments PLC to the default board on 21st November 2013 for noon submission of interim financial statements for the quarter ended 30th September 2013. In a March 2, 2014 story headlined “Touchwood investors raise concerns”, the Business Times reported that “questions are being raised on whether authorities should suspend trading in stocks of the troubled forestry firm Touchwood when the company is not fully functional”.

The SEC on Wednesday announced that after deliberating the findings of the investigation report, there may be serious consequences for the investors of Touchwood investments PLC and they have directed Touchwood to desist from acquiring, transferring, disposing, pledging hiring, mortgaging, leasing, creating a charge over or otherwise alienating any non-current assets depicted in the balance sheet of the Company without the prior approval of the SEC. The regulator has also directed them to desist in any manner from destroying, concealing, altering, removing, amending or cause to be destroyed, concealed, altered, amended or removed any information that is in the records or books of the company maintained in the ordinary course of business.

In the winding up application filed in the Commercial High Court of the Western Province, the company sought to be wound up defaulted on the payments to the creditors agreed in court to settle by 28th February 2014. “In lieu of the default payments the Petitioner informed Courts of its intention to proceed with the appointment of a liquidator. Therefore the SEC in considering the potential risk posed to the investors in light of the seriousness of the offences and the circumstance of the winding up application decided to issue the following directive in order to protect the interest of investors till further notice,” the announcement added. The company has been facing a crisis since its founder Ross Maloney and his director-wife Swarna Maloney sold the company to new investors. They are abroad and evading a current probe by the SEC. The SEC said trading will be suspended until the company releases its long-delayed financial results to the market.

One depositor was quoted in a Business Times report recently as saying that no one picked up the phones at the company office. “I found out that their office has been relocated to Nawala from Joseph Lane, Colombo 4.” He raised concerns as to why the regulators are allowing this share to trade on the stock exchange.

SEC is pursuing the Maloney’s on alleged frauds related to inter-company transfer of funds. Last year Touchwood trading was suspended twice but lifted after clarifications by the company.
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More than 5 firms to delist from CSE

By Duruthu Edirimuni Chandrasekera

The new rules on minimum public float requirement by the Securities and Exchange Commission (SEC) have prompted many listed firms to delist from the Colombo Stock Exchange (CSE) in the coming months, industry sources said.

“More than five firms are discussing with their major shareholders and director boards to delist,” one industry source told the Business Times.

In January, listed companies were instructed to have a minimum public float of 20 per cent in the hands of a minimum of 750 public shareholders or a market capitalisation of Rs. 5 billion of a firm’s public holding in the hands of a minimum of 500 public shareholders whilst maintaining a public holding of 10 per cent. The source added that most firms which aren’t able to adhere to this want to move out of the stock market.

“Their eroding balance sheets are prompting them to delist,” the source added. The latest company to announce delisting is Asiri Central Hospitals, which announced this decision on Thursday to the CSE. This followed an announcement by loss-making Beruwala Walk Inn PLC on Monday seeking permission from the CSE to delist the company in a bid to turn-around the organization and return to profits have failed over the past few years. “The company has been reporting losses almost every year since the tsunami as the hotel was extensively damaged and rendered non-operational unless huge capital is injected to demolish and reconstruct the hotel”. Last month Kuruwita Textile Mills announced it was delisting for the same reasons as Beruwala Walk Inn.

The three companies said that they will take all necessary steps in accordance with the terms of the regulations issued by SEC pertaining to delisting of shares, including the convening of an Extra-Ordinary General Meeting of the shareholders to seek their approval.
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