CSE delisting reaches 10 companies

Hiran H. Senewiratne

DE-LISTING: The number of companies to be delisted from the Colombo Stock Exchange (CSE) will reach 10 with Ceylon Oxygen Limited (COL), CSE sources said.

COL board of directors would probably convene an Extraordinary General Meeting on May 30 to announce the de-listing, Bartleet Mallory Stockbroker sources said.

According to the CSE, during 2005 until recently nine companies were delisted. With the COL it would reach 10, Securities and Exchange Commission External Relations and Market Development Director Malik Cader told the Daily News.

The companies that were delisted during this period according to the Fact Book of the CSE were W.M. Mendis and Company, Ceylon Holiday Resorts Limited, Harbarana Lodge, Intentional Tourists and Hoteliers, Kandy Walk Inn, Lake House Investments, Bata Shoe Company, Glaxo Wellcome Ceylon and NDB Bank.

Cader said that Section 246 of the New Companies Act says where any person pursuant to an offer made to the holder of voting right of a company acquires not less than 90 per cent of the voting rights of such company, such person may within three months of such acquisition give notice in the prescribed manner to all the shareholders holding the outstanding shares carrying voting rights, the desire to acquire such shares and unless the court thinks fit to order otherwise upon an application made by any shareholder to the court within 14 days of the receipt of such notice for the acquisition of shares, shall be entitled to acquire such shares on terms not less favourable than the terms made under the aforementioned offer”.

Further, COL was managed by Yara International, which owned 70.8 per cent of the total share holding. This amounts to 4.78 million share units. Last year COLs entire shareholding was bought by Specialist Gas at Rs 1157 million. Following a mandatory offer Specialist Gas owned 93 per cent stake of COL leaving less than 6.23 per cent shares with the public.

According to the Companies Act the companies that are listed with the CSE should release 10 per cent of the total shareholding with the public, which condition if not met compelled them to be de listed in the stock market.

Cader said that to be delisted from the CSE not less than 75 per cent of shareholders should pass a resolution delisting the company. If any person is aggrieved by the resolution of a Board of a company or resolution of shareholders to de-list may appeal against such resolution to the Commission within 14 days of passing of the resolution.