Sri Lanka’s stockmarket regulator suspends controversial Mackwoods Plantations-related sale

Sri Lanka’s stockmarket regulator on Tuesday suspended the sale of a 60.8 per cent stake in Agalawatte Plantations Plc owned by Mackwoods Plantations Pvt Ltd.
The core of the issue is a family feud over ownership of the Mackwoods Group between its chairman Chris Nonis and related parties and his sister Nirmalie Samaratunga and connected parties.

On Wednesday, the Securities and Exchange Commission (SEC) was very critical of the broker that did the transaction.
In a public statement, the SEC said that the sale last week of a 60 per cent controlling stake in Aggalawatte Plantations (to the Browns Group) was in violation “of the written instructions issued to you (Claridge Stockbrokers Pvt Ltd) and contrary to a directive issued by the SEC is a serious breach of discipline on your part and a matter on which the SEC takes very serious cognizance. Your conduct is aggravated by the fact that Claridge Stockbrokers Pvt Ltd is a company in which Dr. Chrishantha Nonis has an interest.”

The SEC said it was acting on a complaint by Ms. Nirmalie Samaratunga and Ms. M. J. Verma that the 60.8 per cent stake has been sold by Dr. Nonis without proper authorization and approval of the shareholders. “Further to the complaint, the SEC has obtained a copy of the CDS account opening form of Mackwoods Plantations Pvt Ltd and note that the two persons authorized to issue instructions are Ms. Shalendra Ranaweera and Mr. Lalith Fonseka, whereas according to the information provided by you (broker) to the CSE (stock exchange), the written instructions for the sale of the 60.8 per stake … has been issued by Dr. Chris Nonis.”
In these circumstances and subject to inquiry, the SEC said it was withholding the sale under further examination.
Since May, the two parties have been squabbling through public statements issued by both sides with two public relations agencies hired last week to disseminate this information and, according to brokers, which is seen intensifying the battle which is also in courts. (Duruthu)