Tuesday, 21 January 2014 00:01
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Following the presentations made on each of the SEC Directives, a special panel comprising senior officials of the SEC and CSE, including Dhammika Perera, Officer-in-Charge/Deputy Director General SEC, Harshana P. Suriyapperuma, Director Corporate Affairs SEC, Ayanthi Abeywickrama, Director Legal and Enforcement SEC, Rajeeva Bandaranaike, Chief Executive Officer CSE, Renuke Wijayawardhane, AGM Regulatory Affairs CSE and Renu Ranatunge, Manager Legal CSE, also clarified other questions that participants had on implementation. Highlights of some the questions:Q: Can the members of the Board in the Risk Committee of an entity function on the Related Party Transactions Review Committee (RPTRC)?
A: Yes, provided, the committee will fulfil the requirements of the RPTRC and are need to maintain separate minutes.
Q: If Trustees of a Pension Fund are total outsiders and are not Directors of the public listed company, should the Pension Fund’s shareholding in the public listed company be excluded when calculating “Public Holding”?
A: For the stake to be considered “Public,” the Pension Fund should not be under the control of the public listed company.
Q: Does the SEC Directive on Maintenance of Minimum Public Holding as a Continuing Listing Requirement apply to non-voting shares?
A: No, but the Public Holding in other classes of shares needs to be disclosed in the interim financial statements and Annual Report of the public listed company.
Q: Has there been any delay in disclosing share purchases by Directors of public listed companies, due to the requirement under the Companies Act to inform the Board of such purchase and is it not possible to convene a board meeting within five days on all share purchases by Directors?
A: When a share trade takes place, the Director or CEO concerned needs to simply notify the Company Secretary of the public listed company, who will accordingly make the required market disclosure to the CSE.
Q: How can a Main Board public listed company ensure that it maintains 750 public shareholders holding 100 shares each?
A: As an entry criterion to be eligible to list shares on the Main Board of the CSE, a company needs to have a minimum of 1,000 public shareholders holding not less than 100 shares each. The maintenance public holding only requires 750 public shareholders. Further, an option exists whereby the public listed company can maintain 500 public shareholders, with a minimum public holding of 10%, if such company’s public float reflects a market cap of at least Rs. 5 billion.
Q: Has the SEC/CSE prescribed mechanisms for increasing “public holding”?
A: The public listed company has the freedom to devise a suitable plan with defined timelines and submit same to SEC. An issuance of shares to public through prospectus, sale of a partial stake by controlling shareholders through the secondary market, Rights Issue, etc. were discussed.
