The Securities and Exchange Commission of Sri Lanka Compounds Offence against Mr Gamini Fonseka

The Securities and Exchange Commission of Sri Lanka (SEC) initiated action against Mr. Gamini Fonseka for violating the provisions of the Companies Take-overs and Mergers Code , 1995 (TOM Code). Mr Fonseka had made a mandatory offer to the shareholders of Kapila Heavy Equipment Ltd., (KHEL) in terms of his legal obligation to do so under the terms of the provision in the TOM Code but defaulted in making payment to certain shareholders who accepted his offer to purchase shares of KHEL. Mr. Fonseka requested that the offence be compounded and his request was acceded to by the Commission subject to his settling all outstanding payments to shareholders. These payments included an interest component at the rate of 24% based on a previous undertaking given by Mr. Fonseka in that respect.

Upon settlement of all dues by Mr. Fonseka, the SEC compounded the offence in terms of the provisions of the Securities and Exchange Commission of Sri Lanka Act No. 36 of 1987 (as amended) (SEC Act), for a sum of Rs 3.3 million which sum is the maximum payable for compounding of an offence in terms of SEC Act.

Channa de Silva

DIRECTOR GENERAL