Hayleys PLC is neither a shareholder of Lighthouse Hotels nor has it bought any of its shares, says Jetwing Hotels petitioning the Appeal Court against a decision by the Securities and Exchange Commission (SEC).
Jetwing is disputing the SEC’s ruling that Jetwing and Hayleys were not acting in concert in a recent transaction that increased Jetwing’s stake to over 30%, thus triggering the need to make a mandatory offer.
Jetwing says it was Carbotel, a Hayleys subsidiary, that had an agreement with the former (to act in concert when shares were being purchased) and not Hayleys. The latter informed the SEC that the ‘acting in concert’ agreement has been abrogated. Jetwing, in the petition, says the SEC has been ‘activated and manipulated’ by Hayley’s communication into demanding that the petitioner (Jetwing) makes a mandatory offer.
Jetwing says that a mandatory offer will compel the company to raise more than Rs 2 billion which it doesn’t have and “will guarantee the petitioner’s financial ruin’.
The hotel and leisure group, on Monday, sought an interim order against the SEC ruling to direct Jetwing to make a mandatory offer while seeking a permanent ruling from court to quash the SEC verdict.
The relationship in the leisure sector between Hayleys and Jetwing was cemented by two doyens in industry in the 1980s – the late D.S. Jayasundera (Hayleys) and the later Herbert Cooray (Jetwing).
The petition said that Jetwing and Carbotel entered into an agreement in 2003, to act in concert in holding shares in Lighthouse, which meant that they were jointly holding shares of more than 50% and also in control of the management of Lighthouse. |
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