CSE raps sassy offenders on disclosure requirements
View(s):The Colombo Stock Exchange (CSE) is having little ‘chats’ with certain cheeky offenders who flouted the rules.
As per Section 7.8 of the Listing Rules of the CSE which provides for immediate disclosure pertaining to a firm’s dealings, the CSE has found instances where there has been violations and has had ‘one-to-ones’ with certain offenders in the recent past, officials said.
In one instance while the transacted date was November 10, 2016, it was nearly three months later on February 8, 2017 that the CSE was notified. The CSE had warned this particular firm and will be scrutinising others pertaining to such instances. Officials said the CSE requires listed companies to disclose meaningful financial and other information to the public as it provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security. Only through the steady flow of timely, complete, and exact information can people make sound investment decisions.
Immediate disclosure provisions with regard to related party transactions was introduced in 2010, a move that was welcomed by the market. Such disclosure is required for related party transactions exceeding 10 per cent of the equity or 5 per cent of the total assets, whichever is lower.
“It’s a good move as many listed Sri Lankan companies are closely held. Related party transactions could be used to the detriment of the minority shareholders of the company and this timely reporting brings attention to these transactions and analysts could better scrutinize these transactions,” an analyst noted. -(DEC)