Sri Lanka’s famous ‘King of Bonds’ former money broker
Ajith Devasurendra lead Taprobane Holdings own Taprobane Securities which was
recently involved in the controversial The Finance Company (TFC) and National
Savings Bank (NSB) deal will soon announce its clarification on the cancelation
of the ‘Deal’ today to Colombo Bourse, CSE Leaks learn.
“Accordingly ‘King of Bonds’ Ajith Devasurendra articulated
and pioneered Taprobane Securities will write a letter requesting the transfer
of shares of TFC from NSB Custodian account to Taprobane Securities Suspense Account’
market analysts told CSE Leaks.
“Further thereby Sampath Bank will get the opportunity to
recover the loss of over Rs.390 million
and the market would return to normal” the analysts added.
Earlier CSE Leaks reported that Sri Lanka's state owned
public deposit rich National Savings Bank bought a 13.02% stake of former
Ceylinco owned oldest finance golden house of the island The Finance Company
PLC (TFC) on 27 April 2012; after the transaction a filing by Sri Lanka's
former Money Broker and Bond marketer Ajith Devasurendra lead Taprobane
Securities said. However it is now been a question while Sri Lanka’s Bond
Market Pioneer Ajith Devasurendra had represented the mother entity Taprobane
Holdings’ Director Board, sources outline that Devasurendra had not been
representing the board of Directors of Taprobane Securities, the stock
brokering arm which Devasurendra’s junior Dinal Wijemanne-one of TFC Directors
who shed shares to NSB at a premium price-is the CEO/Managing Director position
of the entity.
On 27th April National Savings Bank had bought
7,863,362 ordinary voting shares of TFC at an average price of Rs.49.74 per
share. TFC was the largest contributor to the day's turnover with Rs.394.09
million and a total of 7,982,705 shares traded via 58 trades. Several crossings
were done whilst TFC stocks changed hands in parcels of 2,904,983 and 4,237,400 shares at Rs.50 per share and
701,761 shares at Rs.45 per share whilst the sellers were believed to be
Taprobane Securities CEO Dinal Wijemanne, Raynnor Silva and former Chairman of
failed Tea Company Fern Tea Nirmala Anura Fernando who sold 50,000 shares at
Rs.45 per share. Yogananda Perera and Nandadeva Perera who held TFC shares also
sold their quantities on the same day whilst the TFC share opened at Rs.30 on
April 27, and during the month of April, the TFC share had been trading between
Rs.30-32.50.
On another development The Finance Company PLC (TFC),
whose some directors are involved in a controversial share transaction National
Savings Bank (NSB) made a quite surprising disclosure of a share purchase
transaction of TFC shares by its Director Dinal Wijemanne who is also the CEO
of Taprobane Securities. The disclosure which is as old as 3-weeks said Dinal
Wijemanne the director recently sold nearly little over 2.9 million shares at
Rs.50 on 27th April; had bought 4,983
shares at Rs 30 per share on 16th April, 2012 just one and half weeks before
the selling transaction came in to effect.
But majority investors had raised concerns and questions since
Wijemanne's selling transaction was disclosed to Colombo Bourse on 27th April
(on the same day which transaction took place) whilst the buying transaction
was disclosed way later on the 8th May 2012 according to reports.
Meanwhile it was reported that the Securities and
Exchange Commission (SEC) will be meeting the Board of Directors of Taprobane
Securities today in connection to the contentious The Finance - National
Savings Bank deal, quoting a SEC top official.
“We have summoned the director board of Taprobane
Securities, the brokerage involved in this deal for discussions. Last Friday we
summoned Taprobane CEO/ Director Dinal Wijemanne for clarifications,” SEC
Chairman Tilak Karunaratne had told reporters. He had also said that the SEC
has ordered Wijemanne to provide all his explanations in writing by this Friday
according to reports.
“We’ve told him to submit his explanations in writing by
May 8. However, he had asked for time till this Friday,” Karunaratne had told
reporters.
In the TFC-NSB deal Taprobane Securities had been the
broker for the both buyer and seller. Meanwhile SEC Chairman had told reporters
that this is the first default that has taken place in the history of the
Colombo Stock Exchange in which NSB had not paid the sum of its buying
transaction. He had also confirmed to reporters that the SEC is also currently
investigating into any possible incidents of ‘Insider Dealing’ related to the
TFC-NSB deal and said that the SEC officials last Friday visited the premises
of Taprobane Securities and took into possession several documents and data
that might be useful in the investigation process.
When asked about the actions that can be taken against
Taprobane, Karunaratne had said that if there is proof of malpractice, the
penalty can range from a temporary ban to the revocation of brokering license
according to reports.
SEC Chairman had also noted reporters that as the
regulator, the SEC will be doing its maximum to discover whether; had there
been any wrongdoing with regard to this deal, and said the SEC has also drawn
the attention of the Central Bank on the matter.
White Wash?
Having a Board Meeting with Treasury officials on the ‘Reconfirmation
of the Cancellation of the Controversial TFC-NSB Deal’ on Tuesday May 8 (from
3:00 p.m. to 6:00 p.m.) at NSB
Premises the bank’s Board of Directors which
stood silence from 27th April issued a statement to some media
organizations of the country.
NSB said the following in the Statement:
“The offer from TFC initially came to NSB to subscribe
for their voting shares in January 2011. The bank carried out a detailed
analysis on the TFC and was willing to purchase the voting shares up to
approximately 8.33%. However, since the share issue had been oversubscribed, we
were not in a position to proceed”
“Similarly, the bank received an invitation from a stock
broker to purchase voting shares in March 2012. Since the bank had already
carried out a detailed analysis in January 2011, the Board Sub Committee on
Corporate Lending and Equity Investment decided to relook at the investment
from a strategic initiative point of view with further analysis. Having done a
further analysis, a favourable consideration was given to purchase voting shares
of TFC, amounting to 10%-15%”
“However, since the Board was of the view that benefits
of this investment are not as strong enough to proceed with, a decision was
taken not to make the payment, due on this transaction”
“The above decision was conveyed to the Secretary to the
Treasury Dr. P. B. Jayasundera at the meeting held on 8 May 2012 with the
entire Board of Directors of NSB. Other relevant parties too have been informed
of this development, accordingly. The Secretary advised the Board that the Bank
should not move out from its core activity and advised to promote NSB as a
premier savings bank without exposing its risk profile to maintain public
confidence”
“As a socially conscious and a responsible State-owned
financial institution, we wish to give a strong pledge to the general public
that we would continue to uphold all traditions of our bank and as done in the
past, continue our quest in having the depositors’ and other stakeholders’
total interest foremost in our minds in the future as well as the leader in
developing you and the country.”
Meanwhile, Sri Lanka’s Pink Paper said the county’s
premier business chamber, Ceylon Chamber of Commerce (CCC) which has been so
far silent about the state-owned pension funds and institutions making peculiar
investments in the market, Tuesday issued a statement praising the timely
intervention by the officials in the TFC-NSB deal.
“The Ceylon Chamber of Commerce (CCC) notes with concern
the recent transaction of approximately 13% of The Finance Company PLC. The
chamber believes that ensuring integrity and transparency are vital to maintain
investor confidence in the Colombo Stock Exchange (CSE) for the capital market
to buyer and seller, Taprobane cannot avoid its responsibility towards the
completion of this transaction” Pink Paper said.
However, on Tuesday, Banking Watchdog Central Bank
Governor Ajith Nivard Cabraal had told reporters that as the banking regulator, it has no
role to play in the transaction. Cabraal had told the media that the banking
regulator in a broad sense generally defines the parameters within which banks
can engage in equity investments, and said that thereafter it is "their
business."
