CB likely to cancel Sinhaputra Finance licence (corrected)

Beleaguered finance company, Sinhaputhra Finance PLC’s licence was given notice of cancellation by the industry regulator, the Central Bank with the company objecting to the move.

In an announcement to the Colombo Stock Exchange (CSE) on Friday, the CB said that owing to the critical financial condition, and due to non compliance to the Finance Business Act directions issued by CB, this decision was taken. Sinhaputra has the right to object within 30 days, it said.

The company on Friday itself, announced to the CSE that the company has submitted an objection and that a comprehensive capital plan backed by an investor who has demonstrated financial credibility of meeting the regulatory capital requirement was submitted to the Monetary Board of the CB and the company's awaiting their response.

Last year the company said that it was talking to prospective investors to infuse much-needed capital. 

The company in a stock market filing last November said that the Board of Directors was negotiating with a few potential investors through a professional investment bank. 

“A letter of expression has already been given by one company in the same sector, backed by a bank, and also a keen interest has been shown by a large conglomerate amongst others. Sinhaputhra is awaiting further correspondence from them. Currently, the company’s focus is to find an investor who can actually move beyond the Rs. 2.5 billion capital requirement based on the deadline given,” it said, adding that it will be able to resolve this matter before January 31, 2019.

The CSE put the company on the Watch List due to an emphasis of matter on going concern in the audit report for the year ended March 31, 2018.