SEC, CSE noticed for delays in approving mandatory offer in Agalawatte Plantations

Thursday, 11 August 2016 00:54 - - {{hitsCtrl.values.hits}}

The Court of Appeal yesterday issued notice on the Securities and Exchange Commission, the Colombo Stock Exchange, Director General of CSE, the Central Depository Systems Ltd., Agalawatte Plantations PLC, Dr. Chris Nonis, and Mackwoods Plantations Ltd. in a writ application made by Browns Power Holdings Ltd. challenging the delay by the SEC in approving the announcement for a mandatory offer by Browns Power Holdings following the recent purchase by the company of 60% of the shares in Agalawatte Plantations on the Colombo Stock Exchange. Browns Power Holding has stated in the Petition that the company is obliged under the Takeover and Mergers Code to make a mandatory offer to Agalawatte Plantations after it purchased 60% of the shares in the plantations company on 14 July and has submitted its announcement to the SEC on 15 July for its approval.

Rule 18 of the Takeover and Mergers Code requires copies of all statements and announcements required to be issued or made under the Code and copies of all documents in relation to take-over or merger transaction to be forwarded to the SEC for its approval before such statement, announcement or document is issued, made or dispatched.

Browns Power Holdings claims however, that the SEC has to date unreasonably and arbitrarily failed to grant approval to the announcement and Browns is therefore, unable, under the TOM Code, to appoint its nominees to the Board of Agalawatte Plantations.

Browns Power Holdings complains that it has a legitimate expectation and a right to take control and manage its assets after purchasing a controlling stake of Agalawatte Plantations by paying the due purchase consideration by way of a substantial investment.

The Court of Appeal was presided by Justice Malalgoda and the application was supported by Nihal Fernando PC appearing with Harshula Seneviratne.