Series of questions over segregating life & general business
Ceylinco Insurance PLC has summoned an extraordinary General Meeting (EGM) on January 14 requisitioned by its second largest shareholder, Global Rubber Industries Private Ltd., expressing concern about the proposed segregation of its life and general businesses.
The company has circulated a notice of requisition of the meeting. It has told shareholders that Global Rubber Industries is meeting the cost of circulating the resolutions and related documents among members of the company.
Global Rubber has stated in its resolution that Ceylinco had represented to shareholders in its 2013 annual report that the company will segregate its insurance business by transferring the life and general insurance business of the company to two companies proposed to be fully owned subsidiaries, on the transfer date.
Although the Chairman of Ceylinco Insurance has assured shareholders in the annual report that their interests will be "well safeguarded" and shareholders will be "presented with the relevant details at an EGM for which due notice will be given at the appropriate time," the EGM has not been convened to-date and proper information regarding the segregation of Ceylinco’s insurance business has not yet been placed before the shareholders of the company.
The resolution states that most composite insurance companies listed on the Colombo Stock Exchange have only transferred one class of insurance to a subsidiary while retaining the other class when carrying out the segregation required by the Insurance Board of Sri Lanka.
It complains that Ceylinco has not disclosed with shareholders the manner in which the rights of the shareholders will be protected in a situation where all the assets and business of the company have been transferred to Ceylinco Life Insurance Ltd. and Ceylinco General Insurance Ltd.
The company has also not disclosed what business the company will carry on after the transfer of both class of insurance to Ceylinco Life Insurance Ltd. and Ceylinco General Insurance Ltd.
The resolution states that shareholders of the company are entitled to be fully aware of the manner in which the company will segregate its long term and general insurance business and the consequences of such segregation to the value of their shareholding or investment in the company.
Ceylinco Insurance PLC has summoned an extraordinary General Meeting (EGM) on January 14 requisitioned by its second largest shareholder, Global Rubber Industries Private Ltd., expressing concern about the proposed segregation of its life and general businesses.
The company has circulated a notice of requisition of the meeting. It has told shareholders that Global Rubber Industries is meeting the cost of circulating the resolutions and related documents among members of the company.
Global Rubber has stated in its resolution that Ceylinco had represented to shareholders in its 2013 annual report that the company will segregate its insurance business by transferring the life and general insurance business of the company to two companies proposed to be fully owned subsidiaries, on the transfer date.
Although the Chairman of Ceylinco Insurance has assured shareholders in the annual report that their interests will be "well safeguarded" and shareholders will be "presented with the relevant details at an EGM for which due notice will be given at the appropriate time," the EGM has not been convened to-date and proper information regarding the segregation of Ceylinco’s insurance business has not yet been placed before the shareholders of the company.
The resolution states that most composite insurance companies listed on the Colombo Stock Exchange have only transferred one class of insurance to a subsidiary while retaining the other class when carrying out the segregation required by the Insurance Board of Sri Lanka.
It complains that Ceylinco has not disclosed with shareholders the manner in which the rights of the shareholders will be protected in a situation where all the assets and business of the company have been transferred to Ceylinco Life Insurance Ltd. and Ceylinco General Insurance Ltd.
The company has also not disclosed what business the company will carry on after the transfer of both class of insurance to Ceylinco Life Insurance Ltd. and Ceylinco General Insurance Ltd.
The resolution states that shareholders of the company are entitled to be fully aware of the manner in which the company will segregate its long term and general insurance business and the consequences of such segregation to the value of their shareholding or investment in the company.
The segregation must be implemented on or before February 7, 2015.
The resolution calls for the preparation and the furnishing to shareholders urgently of a report providing information on the segregation including answers to several questions the resolution raises before any further steps are taken to transfer the assets of business from and out of the company for purposes of the purported segregation.
The questions raised includes:
* Does the company intend to transfer all of the assets in the company to Ceylinco Life Insurance and Ceylinco General Insurance Limited?
* What will be the share structure of Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited upon the transfer of the assets and business of the Company to Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited?
The resolution calls for the preparation and the furnishing to shareholders urgently of a report providing information on the segregation including answers to several questions the resolution raises before any further steps are taken to transfer the assets of business from and out of the company for purposes of the purported segregation.
The questions raised includes:
* Does the company intend to transfer all of the assets in the company to Ceylinco Life Insurance and Ceylinco General Insurance Limited?
* What will be the share structure of Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited upon the transfer of the assets and business of the Company to Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited?
* What is the business that the Company will carry on after the transfer of both classes of insurance to Ceylinco Life Insurance and Ceylinco General Insurance Limited?
* How will the rights of the shareholders in the Company be protected in a situation where all the assets and business of the Company have been transferred to Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited?
* Will the existing shareholders of the Company be issued in Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited the same number of shares that the shareholders hold in the Company?
* What are the qualifications and the credentials of the directors appointed to the boards of Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited?
* How did the company select the directors who have been appointed to the boards of Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited?
*Do the said appointed directors have any personal relationship or acquaintance with the existing directors of the Company?
* Why has the company obtained the approval of the Insurance Board of Sri Lanka for the directors appointed to Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited.
* Will the constitution of the Board of Directors of the Company change following the segregation of the life and general insurance business of the company and if so how will the constitution of the Board of Directors of the Company change?
A second resolution calls for the company to seek the opinion of an independent auditor and/or independent investment advisor and/or independent actuary approved by the shareholders to recommend the model for segregation that is most likely to generate optimum results and best protect and/or enhance the value of the investment of the shareholders of the company.
A third resolution calls on the company to place before the shareholders information contained in and set out in the report to be prepared as well as the independent opinions obtained before proceeding to transfer any assets of the business from and out of the company for the purpose of the purported segregation of the life and general business of the company.
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* How will the rights of the shareholders in the Company be protected in a situation where all the assets and business of the Company have been transferred to Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited?
* Will the existing shareholders of the Company be issued in Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited the same number of shares that the shareholders hold in the Company?
* What are the qualifications and the credentials of the directors appointed to the boards of Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited?
* How did the company select the directors who have been appointed to the boards of Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited?
*Do the said appointed directors have any personal relationship or acquaintance with the existing directors of the Company?
* Why has the company obtained the approval of the Insurance Board of Sri Lanka for the directors appointed to Ceylinco Life Insurance Limited and Ceylinco General Insurance Limited.
* Will the constitution of the Board of Directors of the Company change following the segregation of the life and general insurance business of the company and if so how will the constitution of the Board of Directors of the Company change?
A second resolution calls for the company to seek the opinion of an independent auditor and/or independent investment advisor and/or independent actuary approved by the shareholders to recommend the model for segregation that is most likely to generate optimum results and best protect and/or enhance the value of the investment of the shareholders of the company.
A third resolution calls on the company to place before the shareholders information contained in and set out in the report to be prepared as well as the independent opinions obtained before proceeding to transfer any assets of the business from and out of the company for the purpose of the purported segregation of the life and general business of the company.
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