CDB directors’ share dealings disclosed to CSE on same day
It’s a rare occasion when something good transpires at the Colombo Stock Exchange (CSE) and ironically it’s something to be celebrated.
Yes it happened with Citizens Development Business Finance PLC (CDB) which saw the company disclosing a share deal by CDB directors on the same day.
CDB issued a statement to the CSE on August 24 – the day two directors had bought CDB shares. This is ideally how all disclosures related to share dealings of directors should be made – on the day of the trade itself and it rarely happens.
This is a record compared to the spate of late disclosures to the CSE by listed firms pertaining to directors’ share dealings, an analyst said.
In the past the CSE has warned certain firms for non-compliance with rules pertaining to their ‘Continuous Listing Requirements’. Specifically in terms of Section 7.8 of the Listing Rules of the CSE, the CSE has seen firms not adhering to immediate disclosure pertaining to a firm’s director’s share dealings. The CSE has seen instances where they aren’t immediate, an official said noting that now CSE is following up with reasons as to why the ‘lateness’ by certain offenders who complied after many ‘calls’ asking them to meet the terms.
The most recent incident was a disclosure dealing in relevant dealings in shares of a listed Bimputh Finance PLC (Bimputh) that was late. The share dealings of directors on August 31 were disclosed to the CSE on September 11. This was done after the CSE had called the company to send the disclosure. Bimputh on September 9 announced that they were compliant with minimum public float requirements – another CSE rule stating that now their public float is at 10 per cent from the earlier 7.5 per cent on August 2. No disclosures in the period between August 2 and September 9 were made by the company. Then subsequent to the CSE’s query, Bimputh said on September 11 that its Deputy Chairman and Acting CEO had disposed nearly 2.7 million shares in the company.
The CSE official said that there are some such disclosures that are at times a year late. “These are a far cry from immediate disclosures,” the official added. Last year too, the CSE warned three firms on similar errant behaviour, he said. One such instance was when a director disclosed share dealings to the Renuka Capital PLC Board on July 7 last year but the board had informed the CSE only on July 30 this year. The company said that this was due to an ‘oversight’.
The official said that the CSE will be scrutinising firms in future pertaining to such instances and the new regulations will deter offenders from delayed disclosures.
The CSE is a disclosure based environment and the public companies are required 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.
The Securities and Exchange Commission had directed the exchange to amend the listing rules on disclosure requirements in relation to related party transactions of listed firms in September 2010. This was after a Business Times story that same month highlighting this issue pertaining to listed firm directors’ disclosures.