SC rules in favour of SEC in application filed by investor over quantum of fine

Friday, 14 March 2025 00:04 - - {{hitsCtrl.values.hits}}

The Supreme Court of Sri Lanka, on 11 March, dismissed the Leave to Appeal Application filed by Vidullanka PLC Managing Director and Chief Executive Officer Riyaz Mohamed Sangani, against the Court of Appeal’s order, which had been granted in favour of the Securities and Exchange Commission of

Sri Lanka (SEC).

The case was heard before a three-judge bench comprising His Lordship Justice Yasantha Kodagoda, PC, Justice Sampath B. Abayakoon and Justice M. Sampath K.B. Wijeratne.

In 2023, pursuant to an application made by Sangani, the SEC had provided him with an opportunity to compound the four offences committed by him under Sections 32(1) and 32(6) of the then SEC Act, imposing a penalty of Rs. 3 million per offence, which amounted to a total of Rs. 12 million for insider dealing in the shares of Vidullanka PLC.

Sangani filed a Writ Application in the Court of Appeal, against the decision of the SEC, seeking a Writ of Mandamus to compel the SEC to compound the four offences at a lesser amount. He had argued that the quantum of the penalty was arbitrary, capricious, and unreasonable, rendering it ultra vires the SEC’s powers.

However, the Court of Appeal ruled in favour of the SEC’s decision, in arriving at a finding that Sangani had failed to establish a prima facie case for judicial review and dismissed the application.

The Supreme Court upheld the decision of the Court of Appeal on 11 March, reinforcing the SEC’s authority in determining penalties for securities violations and affirming its regulatory mandate in ensuring market integrity.

Chandaka Jayasundara PC appeared for the petitioner Sangani and Vikum de Abrew PC appeared for the respondents.

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