The Securities and Exchange Commission (SEC) is in the process of incorporating public comments in the proposed Takeovers and Mergers (TOM) Code, SEC officials said. “We’re trying to add comments we got from the public,” an official told The Business Times.
Meanwhile, the industry is calling for a simpler TOM code, than the one which is drafted, saying that it is two complicated and at some instances raises questions. “The main grouse that many are lamenting about is inclusion of monitoring indirect takeovers firms and they say that the SEC is not in a position to monitor takeovers of British Virgin Islands (BVI) incorporated companies,”a corporate lawyer who did not wish to be named told the Business Times.
He added that a TOM panel is also proposed in the draft code, where conflict of interest is a serious issue as the panelists who will sit at the TOM panel will (there’s a high probability) be connected parties (as Sri Lanka is a small country). “Also the skill set required for this isn’t available,” he added, saying that maybe the new code is ahead of its time.
He also said that the new code requires many formalities with regard to an initial public offering by a firm. “There’s a set of compliance guidelines and one is required to audit the offer document, which all adds up to cost,” he noted.
In defense, SEC officials say that most deals which involve TOMs are equally complicated. “What’s been drafted is with international standards. We cannot wait for the share market to be better developed. We need to be on apart with international; standards when it’s more developed than this,” an SEC official said. |
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