Court of Appeal rejects application by 3 minority shareholders of Expolanka to stop today’s EGM

Wednesday, 27 March 2024 03:06 - - {{hitsCtrl.values.hits}}

Three minority shareholders of Expolanka Holdings yesterday filed a Writ Application before the Court of Appeal seeking a stay order restraining the holding of the EGM today on the exit offer.

The Petitioners also sought relief against the Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) to conduct investigations into the complaints made by the Petitioners.

Dr. Romesh de Silva PC and Nihal Fernando PC who appeared on behalf of Expolanka and the Chairman of Expolanka, respectively, submitted that the application presented by the Petitioners relates to a shareholder dispute and the Court of Appeal is not the appropriate forum to hear this matter. Further, it was submitted that an application seeking approval for the delisting would be made to the SEC in terms of the relevant delisting Rules once the shareholders’ approval is obtained and the SEC will make necessary inquiries at that stage and that the application of the Petitioners is patently premature.

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The Petitioners specifically sought further relief against the CSE and sought to challenge the suspension of the share trading by the CSE as soon as the corporate disclosure for the voluntary delisting was made.

Avindra Rodrigo PC, representing the CSE, emphasised that all actions taken by the CSE were in strict compliance with the relevant SEC Rules. He also assured that the CSE is committed to adhere to the SEC Rules at all times. Rodrigo further stressed the necessity of maintaining an environment conducive to international investment.

All Counsels appearing for the Respondents impressed upon court that the SEC Rules provide a remedy for any party who is aggrieved by a shareholders’ resolution approving a delisting, to appeal to the SEC and therefore the application of the Petitioners should be dismissed.

Their Lordships Justice Sobhitha Rajakaruna and Justice Dhammika Ganepola, who heard the submissions made on behalf of the parties, were not inclined to grant any relief sought by the Petitioners. They agreed that there is an alternative remedy available for the Petitioners and were also of the view that the Petitioners have not established a case warranting issuance of notice and dismissed the application on the first day it was taken up in Court for support.

Dr. Sunil Cooray appeared for the Petitioners, Dr. Romesh de Silva PC with Niran Anketell appeared for Expolanka, Nihal Fernando PC with Harshula Seneviratne appeared for the Chairman of Expolanka, Avindra Rodrigo PC with Kasuni Jayaweera appeared for the CSE and the SEC was represented by the Attorney General’s Department.

Expolanka Holdings, a global logistics leader, on 1 March announced its voluntary delisting from the Colombo Stock Exchange with the majority shareholder extending a share buyback offer at Rs. 185 per share. With a market capitalisation exceeding Rs. 294 billion, Expolanka stands as the most valuable company listed on the CSE.

At today’s EGM the Special Resolutions sanctioning the delisting will come up for voting.