2006

• D. A. Samaradiwakara,   B. A. Jayasekara,   U. H. Dharmadasa,   K. M. N. Piyarathne,   Michael De Saram,   M. T. Ganhewage,   L. C. Pallegedera,   Mahanama Jayaweera,   Jayantha Dharmadasa - 22-November 2006
• Invitation for Bids - Interior Designing, Partitioning, Furnishing, Flooring Lighting, Cabling and Wiring
• PRESS RELEASE - Mr Sajee Lakshman Perera - 3 November 2006
• PRESS RELEASE - 11- 10-2006
• NOTICE - RE : STAMP DUTY
• Press Release - South Asian Regulators' Forum - 18-08-2006
• Press Release - 19-05-2006
• Press Release-17-03-2006
• Notice- Introduction of a Securitisation Act to Sri Lanka 17-03-2006
• Notice - Registration of Market Intermediaries 26-02-2006
• Press Release - IT Pioneer Appointed SEC, IBSL Chief 09-02-2006

2005

• Notice-Registration of List of Suppliers 2006 - 12-12-2005
• Press Release - 05-09-2005
• Press Release - 17-08-2005

25-April-2005

27 September 2004

SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA

Representations were made to the Securities and Exchange Commission (SEC) on 24 September 2004 by the Attorney-at-Law for Mr. H. N. Gunawardena reiterating his innocence of any wrongdoing in relation to the offence of insider dealing in the trading of shares in Aitken Spence and Company Limited in the year 2002 and seeking to conclude the outstanding matter.

The Commission at its meeting on 24 September 2004 decided that the matter can be compounded if Mr. Gunawardena made a payment of Rupees Two Million and Five Hundred Thousand to the Compensation Fund established under the SEC Act. The SEC Act provides for any offence to be compounded for a sum of money not exceeding one-third of the maximum fine imposable for such offence. Mr. Gunawardena accordingly made the payment. The action instituted by Mr. Gunawardena in the Court of Appeal against the SEC and the Commission Members will therefore be withdrawn.

In terms of the SEC Act, compounding does not entail a finding of guilt.

Benny P. Tissera
Officer in charge
SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA

27 September 2004

SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA

Representations were made to the Securities and Exchange Commission (SEC) on 24 September 2004 by the Attorney-at-Law for Mr. M. L. Mack reiterating his innocence of any wrongdoing in relation to the offence of insider dealing in the trading of shares in Aitken Spence and Company Limited in the year 2002 and seeking to conclude the outstanding matter.

The Commission at its meeting on 24 September 2004 decided that the matter can be compounded if Mr. M. L. Mack made a payment of Rupees Three Million and Three Hundred Thousand to the Compensation Fund established under the SEC Act. The SEC Act provides for any offence to be compounded for a sum of money not exceeding one-third of the maximum fine imposable for such offence. Mr. M. L. Mack accordingly made the payment. The action instituted by Mr. M. L. Mack in the Court of Appeal against the SEC and the Commission Members will therefore be withdrawn.

In terms of the SEC Act, compounding does not entail a finding of guilt.

Benny P. Tissera
Officer in charge
SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA

7 September 2004

New Look for SEC Website - www.sec.gov.lk

The Securities and Exchange Commission of Sri Lanka (SEC) has revamped its website www.sec.gov.lk which will give its stakeholders more information particularly on the regulatory and the market development aspects of the Capital Market of Sri Lanka. The website is interactive and user friendly.

The web site would be updated regularly to ensure that investors are kept informed of the latest developments in the Capital Market. The site contains information about the SEC, Rules and Regulations, legislative powers of the SEC, Investor Education, Information for foreigners as how to invest in Sri Lankan Share Market, information on the capital market of Sri Lanka publications including the SEC Act, Annual Reports in PDF format and features a current updations on Press Releases. The Site has a complaint page where investors could make complaints.

The site has links to IOSCO, CSE, PERC, BOI and Central Bank. It also has a link to the IOSCO 2005 Website where other international regulators could source information and register for the IOSCO 2005 Annual Conference, which will be held in Sri Lanka in 4-7 April 2005 hosted by the SEC.

SEC invites the general public to surf it’s Website and to provide their feedback.

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka

19 August 2004

SEC Radio Programmes

The Securities and Exchange Commission of Sri Lanka will conduct a series of weekly radio programmes on the Capital Market commencing 22 August 2004 (Sunday) on English service of Sri Lanka Broadcasting Corporation (SLBC) between 9.30 a.m. to 10.00 a.m. with the intention of creating awareness and educating listeners on the Capital Market of Sri Lanka.

These programmes will feature professional from the securities industry while listeners will have the opportunity to call in and clarify any concerns.

These programmes will cover areas such as introduction to Capital Market, Benefits of investing, the Colombo Stock Exchange, Investing in Unit Trust, Role and function of a Stock Broker and How to invest, Selecting Stocks, Investment Analysis, Ratings, advantages of listings and Investor Protection.

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission Sri Lanka

23 July 2004

CAPITAL MARKET PROMOTION IN JAFFNA

A Capital Market team headed by Mr. Palitha Silva Gunawardene, Director General of the Securities and Exchange Commission of Sri Lanka visited Jaffna on 19th and 20th July 2004 with the intention of promoting the development of the Capital Market in the Jaffna peninsula. Arrangements are underway to open a branch of the Colombo Stock Exchange in Jaffna by early September 2004. This will be jointly funded by the SEC and the CSE. The premises of the proposed branch of the Colombo Stock Exchange was inspected during the visit which is situated in the center of the Jaffna commercial area.

The delegation met the members of “Yalpanam Chamber of Commerce” and had a discussion on the future prospects. Mr. M. Ramadas, Chairman of the Chamber of Commerce and Institution of Yalpanam stressed that they would be looking forward for benefits to accrue to the people of Jaffna as a measure of success of the Stock Exchange branch in Jaffna. A public meeting attended by over 200 Entrepreneurs, Professionals and Businessmen was held at the Jaffna Multi Purpose Cooperative Society, Auditorium. A seminar for over 400 undergraduates was also held at the Jaffna University. The presentations were made on the “ Introduction to the Colombo Stock Exchange, How to invest in Equities, Investing in Debt Securities, Unit Trust and the Regulation of the Capital Market”. All presentations were conducted in Tamil or were simultaneously translated into Tamil.

The Securities and Exchange Commission and the Colombo Stock Exchange are planning to have a promotional booth at the Nallur Temple Annual Festival to promote and create awareness on Capital Markets scheduled for August 2004.

The delegation also comprised of Mr. Malik Cader, Director, Public Relations and Market Development of the SEC, Mr. Rajeeva Bandaranaike, Senior Manager Marketing and Public Relations of the CSE, Ms Shivani Thirugnanasamdanthan, Branch Manager, designate Jaffna, CSE and Officials representing HNB Stockbroker, Asia Securities, CT Smith, DP Global, Sommerville, NAMAL, Capital Alliance and NatWealth. The total strength of delegation from Colombo was nineteen (19).

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka



7 July 2004

NEW UNIT TRUST CODE PAVES THE WAY FOR CLOSE ENDED UNIT TRUSTS

The New Unit Trust Code paves the way for the Securities and Exchange Commission of Sri Lanka to licence Close Ended Unit Trusts and this create avenues for new products in the market. This code also includes several measurers meant to improve the regulatory structure of the Unit Trusts.

Under the new code a licensed Unit Trust Management Company can apply for a licence for a Close Ended fund in addition to an Open Ended fund hitherto permitted. A Close Ended fund would issue units at the inception and thus have a fixed number of units during its tenure. During this period the fund manager may facilitate the sale of units or units could be traded on the Colombo Stock Exchange if the fund is listed. Thus the fund provides certainty in the number of units during a fixed period and opportunity to encash its investments with optimal benefits for its unit holders. An Open Ended fund continues to issue new units even after the initial offer period, and redeem units in issue, until the liquidation of the fund.

The new code also provides flexibility that a new trust can specify its investment criteria in accordance with its stated objectives subject to general investment restrictions generally applicable to all schemes approved by the Commission, which are specified in the code.

The liquidity requirement of an approved Open Ended Unit Trust is also revised down from 10 percent to 5 percent of the deposited property to facilitate increased investments. The liquidity criteria is set out to ensure that a trust is in a position to meet the expected redemption requirements from unit holders. The code has defined the investments that fulfil the liquidity criteria.

The new code also allows the Unit Trusts to publish its interim reports in leading newspapers to satisfy the requirements of providing information to the Unit Holders whilst enabling the trust to reduce the expenses of the fund as well.

The Securities and Exchange Commission anticipates that this new code will facilitate substantive development in the Unit Trust industry particularly through the advent of new funds with different options catering to hitherto under served market segments.

Copies of the new Unit Trust code could be obtained from the Securities and Exchange Commission or from the SEC Website www.sec.gov.lk.

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka

30 June 2004


SEC Issues Guidelines for Listed Companies in respect of Audit and Audit Committees

The Securities and Exchange Commission (SEC) has issued Guidelines for Listed Companies in respect of Audit and Audit Committees. These Guidelines have been circulated among all listed companies and at present adoption is on a voluntary basis.

The objectives of these Guidelines are to strengthen the effectiveness of the existing audit process, promote and facilitate the adoption of corporate governance practices which are comparable with global standards, enhance accuracy, transparency, consistency and reliability of financial statements and develop a system which would provide enhanced reliability of financial reporting in listed companies in order to enhance investor confidence.

These Guidelines are focused on two areas i.e. Guidelines for “External Auditors” when auditing listed companies and Guidelines for “Audit Committees” of the listed companies. The former deals with amongst other things the qualifications, appointments, powers and remuneration of auditors, audit partner rotation, conflict of interest, independence of auditors, disclosure requirements, financial reporting, restricted and permissible non-audit services which should be practiced by the External Auditor. The latter features the composition, objectives, powers and duties of an Audit Committee of a listed company. These Guidelines are supplementary to all the applicable laws and regulation of Sri Lanka.

These Guidelines have been posted on the SEC web site www.sec.gov.lk. The main provisions, which are highlighted in the Guidelines, would be incorporated in the Colombo Stock exchange Listing Rules, and thereafter would be applicable to all listed companies on a mandatory compliance basis in two stages commencing from April 2005. However, the provision on audit partner rotation will become applicable to a listed company either on 1 January 2006 or 1 April 2006 depending on the financial year of the respective listed company.

The Guidelines are a result of deliberations made by a stakeholder Committee appointed by the SEC to study “The Role of Auditors”, and the public consultations including deliberations made at the consultation workshop conducted by the SEC. Presently the SEC has moved a further step in forming a stakeholder committee on corporate governance. This committee is currently reviewing the ICASL “Code of Best Practice on Corporate Governance” with a view to having one composite Code on governance for listed companies.

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka




22 July 2004

THE SEC RECOMMENDS A REVISION OF THE RECENT ICASL CODE ON CORPORATE GOVERNANCE

A recent study of the International Federation of Accountants indicated that the failure of most high profile corporate audit reports are attributed to non compliance by the Companies with the principles of good governance and financial reporting and the failure of the governing bodies to monitor the same. The report also highlights the important contribution various stakeholders can make in arresting such situation.

Thus the Securities and Exchange Commission (SEC), recognizing the importance of arresting such situation, constituted a Stakeholder Committee comprising of key Stakeholders of the Corporate Sector. The SEC, in consultation with the said Stakeholder Committee, reviewed the “Code of Best Practice on Corporate Governance” issued by the Institute of Chartered Accountants of Sri Lanka (ICASL) in relation to the internationally accepted Codes formulated by the US, UK, EU and OECD. Pursuant to an exhaustive study, the Committee identified “gaps” for which revised and additional clauses were recommended to be included in the said Code of ICASL. These recommendations were forwarded to ICASL along with the “Guidelines for Listed Companies (Audit and Audit committees)” drafted by the SEC and communicated to all Listed Companies through the Colombo Stock Exchange (CSE) to be adopted voluntarily.

The SEC has requested ICASL to revise the relevant ICASL Code(s) and formulate one composite Code incorporating the recommendations within the next three months so that the SEC could issue same to the Listed Companies for voluntary adoption. It is intended the main provisions of the said composite Code be subsequently incorporated in the Listing Rules of the CSE for mandatory compliance by the Listed Companies. It is also expected that this composite Code be co-branded as the ‘ICASL/SEC Code on Corporate Governance’.

The SEC appointed Stakeholder Committee comprised of Mr. Ranjit Fernando (Chairman of the Committee), Mr. Nivard Cabraal, Principal Consultant, Cabraal Consulting Group (Pvt) Ltd., Mr. Arittha Wikramanayake, Partner, Nithya Partners, Mr. Hemaka Amarasuriya, Chairman, Singer Sri Lanka Ltd., Mr. B. R. L. Fernando, Chairman, CIC Group of Companies, Professor Willie Mendis, Senior Professor, University of Moratuwa, Mr. V. Kandasamy, Deputy Auditor General, Ms. L. Seresinhe, Director, Corporate Affairs (SEC) and Mr. Benny Tissera, Director, Supervision (SEC).

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka

The International Organisation of Securities Commissions (IOSCO), Asia Pacific Regional Committee (APRC) and Enforcement Director's Meeting of 2004 was held in Wellington, New Zealand from 19th February 2004 to 20th February 2004. The Securities and Exchange Commission of Sri Lanka was represented by Lt. General J.E.D. Perera - Chairman, Mr. Palitha Silva Gunawardene - Director General, Mr. Benny P. Tissera - Director Supervision Division and Ms. Damayanthi Fernando - Executive Legal Division. The Director General Mr. Palitha Silva Gunawardene presented a paper on Corporate Governance the Sri Lanka Perspective mainly on the initiatives taken by the Securities and Exchange Commission of Sri Lanka to foster Good Corporate Governance. The paper presented resulted in lengthy discussions by the delegates.

A paper was also presented on The overview of the recent developments in Securities Regulations and Market Developments in Sri Lanka by Mr. Palitha Silva Gunawardene at the APRC Meeting and the Countrypresentation on The Securities Market of Sri Lankaby Mr. Benny P. Tissera at the Enforcement Directors' Meeting.

During this meeting Sri Lankan delegates also met the then Minister of Commerce and Immigration Ms. Lianne Dalziel at the New Zealand Parliament premises and exchanged views on the matters of mutual interest. Sri Lankan delegates are photographed with the Minister as shown above from left to right are Lt. General J.E.D. Perera -Chairman, Mr. Palitha Silva Gunawardene - Director General, Mr. Benny P. Tissera - Director Supervision Division and Ms. Damayanthi Fernando - Executive Legal Division.

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka



3 March 2004
VISIT OF THE DEPUTY SECRETARY GENERAL
OF INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS (IOSCO)

The Deputy Secretary General of the International Organization of Securities Commissions (IOSCO) Mr. Jean Pierre Cristel is currently on a visit to Sri Lanka. Mr. Cristel has been with the IOSCO since its inception in 1983. Mr. Cristel is based at the IOSCO headquarters in Madrid, Spain.

IOSCO consists of approximately 181 members. It regulates more than 90% of the world's securities market and IOSCO is today the world's most important international cooperation forum for securities regulatory agencies. The members of IOSCO meet every year at the Annual Conference to discuss important issues related to world securities and futures markets. The objectives of the Organization are to co-operate together to promote high standards of regulation in order to maintain just, efficient and sound markets; to exchange information on their respective experiences in order to promote the development of domestic markets; to unite their efforts to establish standards and an effective surveillance of international securities transactions; and also to provide mutual assistance to promote the integrity of the markets by a rigorous application of the standards by effective enforcement against offences.

Mr. Cristel is also reviewing plans and arrangements for the 30th IOSCO Annual Conference, which is scheduled to be held in Sri Lanka during the month of April 2005. The SEC Sri Lanka successfully bid to host the 30th Annual Conference, at the 27th Annual Conference held in Istanbul, Turkey, in 2002 having competed with Spain. The 29th Annual Conference will be held in Jordan in May 2004. This is the major event in the IOSCO calendar. It expected that around 750 delegates from Securities Markets Regulators, International Stock Exchanges, Fund Managers, relevant NGO's and non-members around the world would attend the 30th IOSCO Annual Conference in 2005.

Mr. Cristel, is also expected to meet top Government Officials, Officials of the SEC and the Colombo Stock Exchange as well as Press during his visit.

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka


Application for Registration of Suppliers and Contractors for the Year 2004

8 January 2004

"The Securities and Exchange Commission of Sri Lanka to assist in developing the Unit Trust Industry"

The Securities and Exchange Commission of Sri Lanka (SEC) has called for proposals from the Unit Trust Management Companies to draw up plans to further develop the Unit Trust Industry in Sri Lanka.

The SEC is currently holding discussions with Chairmen and the Chief Executive Officers of the Unit Trust Management Companies to ascertain ways and means of expanding the industry. The SEC is particularly concerned of the decrease in the number of unit holders and the resultant lack of widespread distribution both geographically and among the rural investors. Unit Trust was introduced to Sri Lanka in 1991 with the intention to act as a conduit for the rural investors to access the Capital Market.

Currently the majority of Unit holders are from Colombo and the suburbs, with sparse distribution of Units in the outstation areas. One of the main concerns the SEC has is the insufficient distribution channels and efforts to market Unit Trust in the outstation areas. It is noted that out of the five Unit Trust Management Companies four are subsidiaries / associates of Banks and the potential synergies of using the Bank's presence has not been fully realized to promote and market Units to potential investor in those areas.

The SEC has also identified the following specific areas amongst the issues to be addressed by the Management Companies to increase the Unit holder base;

Unit Trust Association with the assistance of the Management Companies should conduct an awareness programme to popularize the Unit Trust Industry. This should inter alia include the conduct of seminars and Road Shows in selected areas where there appears to be potential for investment opportunities

Introduction of innovative new Products and Close Ended Unit Trusts to cater to a wider cross section of investors

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka



05 December 2003
"Stock Market & You " - Quiz Programme on Rupavahini

The Securities and Exchange Commission of Sri Lanka (SEC) for the first time conducted a quiz programme titled "Stock Market & You" in the Tamil Medium for the G. C. E. Advanced Level Commerce students Island-wide. A total of 300 students took part in the preliminary examination, representing all educational districts including Northern, Eastern, Western, Southern, Central, Uva, Sabaragamuwa, North Western and North Central Provinces. This included students from schools in Jaffna, Kilinochchi, Mannar, Vavunia, Trincomalee, Eravur, Kanthalai, Kalmunai, Batticaloa and Kaththankudi. 30 students qualified to take part in the five semi finals, which is currently being telecast every Friday at 8.30 p.m. on Rupavahini Channel Eye. The final in which the winners of the five semi finals participated is expected to be telecast on 2 January 2004.

The SEC conducted a similar programme this year in Sinhala Medium, and was telecast on Rupavahini until the 6 November 2003. A total number of 500 students sat for the preliminary examinations from the Western, Southern, Uva, Sabaragamuwa, Central, North Western and North Central Provinces. Such programmes were also conducted in 1997, 1998 and 1999 in Sinhala Medium, which created a great impact on the students and the general public. There were several requests for the revival of this programme.

Since the subject of Capital Markets was introduced to the G. C. E. Advanced Level (Commerce) curriculum the Securities and Exchange Commission was instrumental in introducing publications to assist students offering the subject at the examination. The SEC also conducts seminars to educate teachers and students on the subject of Capital Markets. A TV Quiz programme complements SEC efforts in creating awareness and educating the students and the public on this subject.

These Quiz programmes were organized in association with the National Institute of Education (NIE ) Maharagama. The questions were based on the G. C. E. Advanced Level curriculum in the areas of Economics, Business Studies and Capital Markets. The questions had a 75% weightage on Capital Markets and the balance was selected from the subjects of Business Studies, Insurance and Economics, which are also in the curriculum.

The winner of the preliminary contest received Rs. 5,000 whilst the 1st runner-up and the 2nd runner-up received Rs. 3,000 and Rs. 2,000 respectively. The winner of the finals received Rs. 25,000 whilst the 1st runner-up and the 2nd runner-up received Rs. 15,000 and Rs. 10,000 respectively.


"Stock Market & You"
Quiz Programme (Tamil) on Rupavahini Channel Eye

Participants from the Northern Province

Seated Left to Right Mr P Suresh (Vavuniya Tamil Maha Vidyalaya, Vavuniya), Miss Vanaj Srisomasundaram (Jaffna Hindu Ladies College, Jaffna), Miss Santhaneswaran Kinthsha (Mahajana College, Thelipalai, Jaffna), Miss Tharsini Suntharam (Rambaikulam Maha Vidyalaya, Vavunia), Mr Selvanayagam Kajan (Kilinochchi Hindu College, Kilinochchi), Miss S Mary Jeslin Perera (St. Lusias Maha Vidyalaya, Mannar)

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka



2 October 2003
SEC conducts Quiz Programme on Stock Market for telecast on Rupavahini

The Securities and Exchange Commission of Sri Lanka (SEC) in association with the National Institute of Education (NIE) successfully conducted a Quiz Programme in the Sinhala Medium titled "Stock Market & You". The progrmme is currently being televised every Thursday at 6.15 p.m. on Rupavahini until the 6 November 2003.

Such programmes were conducted in 1997, 1998 and 1999 creating impact on the students and the public. There was numerous request for the revival of this programme.

The subject of Capital Markets has been introduced to the A/L curriculum. The Securities and Exchange Commission has introduced publications to assist the A/L students. The SEC also conduct seminars to educate teachers and students on the subject of Capital Markets. A TV Quiz Programme complements SEC efforts in creating awareness and educating the students and the public on this subject.

The questions were based on the Advanced Level curriculum in the areas of Economics, Business Studies and Capital Markets. The questions had a 75% weightage on Capital Markets and the balance was selected from the subjects of Business Studies, Insurance and Economics, which also comes under the curriculum.

All schools in the designated provinces were requested to nominate one student to take part in the preliminary examination. A total number of 500 students sat for the preliminary examinations from the Western, Southern, Uva, Sabaragamuwa, Central, North Western and North Central Provinces. From the seven preliminary examinations conducted in the said districts six participants were selected from each Province to take part in the semi finals of the Quiz Programme on Rupavahini.

The examination was held under the auspices of the Divisional Education Office. Teachers from the Education Department from each Province invigilated the examination and corrected the answer scripts.

The winner of the semi finals received Rs. 5,000, 1st runner-up - Rs. 3,000 and the 2nd runner-up - Rs. 2,000 respectively. The winner of the finals received Rs. 25,000, 1st runner-up - Rs. 15,000 and the 2nd runner-up - Rs. 10,000 respectively.

Currently the Securities and Exchange Commission of Sri Lanka is planning the conducting of a Tamil Quiz Programme as well for all Provinces including the North and East.

This is expected to commence on 4th October 2003 with the conduct of the preliminary examination for which about 600 students are expected to participate.

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka

29th September 2003

SEC seeks public views to revise the Takeovers and Mergers Code 1995 as amended.

The Securities and Exchange Commission of Sri Lanka (SEC) has appointed a Committee to review the Takeovers and Mergers Code 1995 as amended. The committee comprises of Mr Saleem Marsoof P C - Additional Solicitor General (Chairman), Mr R Senathirajah - Julius & Creasy (Member), Mr U L Kadurugamuwa - F J & De Saram (Member), Mr Mahinda Haradasa - Varners Lanka Law Office (Member), Mr Naomal Goonewardene - Nithya Partners (Member), Mr Paul Ratnayake - Paul Ratnayake Association (Member), Mr. Reyaz Mihular - KPMG Ford Rhodes Thornton (Member) and Mrs. Lasinee Seresinhe - Director, Corporate Affairs, Securities and Exchange Commission of Sri Lanka (Member/Convenor).

The Committee at its inaugural meeting decided to seek the views/comments of the public on all aspects of the Takeovers and Mergers Code including in particular the following:

The mandatory requirement of having to make an offer in terms of rule 31 of the Code; the requirement of having to make an offer to accept all the shares from the remaining shareholders in terms of rule 31 of the Code, the scope of the independent advice provided for in rule 12 of the Code, the absence of provisions in the Code in relation to company mergers, the adequacy of requirements relating to disclosures and the liability of indirect holders of the offeror.

The public is welcome to make representations on their views and comments to the Secretariat on or before 12 October 2003.

The present Code could be viewed on SEC website www.sec.gov.lk and printed copies are available at the SEC Secretariat.

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka.




25th September 2003

The attention of the public is drawn to the Annual Report 2001 item 5 (Page 22) SEC vs. Rohan Fernando and to the same caption under item D (Page 24). Mr Rohan Fernando, Director of CT Smith Stockbrokers (Pvt) Ltd., compounded the alleged offence on the understanding that it was not an admission of guilt, and it was on that basis that the SEC withdrew the action against Mr Fernando.

Palitha Silva Gunawardene
Director General
Securities and Exchange Commission of Sri Lanka

Anual Report.................................

Draft Guidelines for Auditing in Listed Companies 

The Securities and Exchange Commission (SEC) calls for public views on the Draft Guidelines for Auditors and Audit Process in relation to listed companies. The objective of these Draft Guidelines is to strengthen the existing Audit Process in listed companies in order to enhance investor confidence. The Draft Guidelines for Auditing in Listed Companies contemplate inter alia: Duties, Responsibilities, Audit Partner Rotation, Conflict of Interest, Financial Reporting, Restriction of Non-Audit Services and Applicable Law.

These Draft Guidelines are the result of deliberations of a SEC appointed Committee on the “Role of Auditors” which had multiple consultations comprising of senior members of regulatory bodies and representative senior partners of Audit Firms. The recommendations would be supplementary guidelines to the existing “Code of Best Practice on Audit Committees” published by the Institute of Chartered Accountants of Sri Lanka (ICASL).

The Draft Guidelines have been posted in our web site www.sec.gov.lk and the SEC invites the public and/or corporate bodies to forward their feedback to the Secretariat by mail, e-mail or fax on or before 18 September 2003, as these will be debated at a workshop to be held on 26 September 2003.

The Director General
Securities and Exchange Commission of Sri Lanka
Level 11-01, East Tower, World Trade Centre, Colombo 1.
Fax : 2439149 E-mail : E-mail : mail@sec.gov.lk Web Site : www.sec.gov.lk



5th August 2003

Sri Lanka's Minister of Finance has appointed Mr. Palitha Silva Gunawardene as the new Director General of its Securities and Exchange Commission, the regulatory body for the country's securities markets. He assumed duties with effect from 01st July 2003.

Until his appointment Mr. Gunawardene was the Director of Economic Affairs of the Telecom Regulatory Commission of Sri Lanka. He was in the forefront of implementing policy and regulatory reform in the telecom sector. Having joined the Commission in May 1998 Mr. Gunawardene was entrusted with the task of establishing and operationalising its Economic Division and supporting the efforts to build a modern and a dynamic regulatory agency. He has been commended for his services to the Commission and has been recognised both locally and internationally for his skills as a regulator. Several of Mr. Gunawardene's articles have been published internationally whilst he has served on the international training faculty for training of South Asian Infrastructure regulators, an initiative of the World Bank. He has represented the Commission at many an international fora on telecom regulation and is a sought after expert in the region.

Previously Mr. Gunawardene was in Corporate Financing and Investment Banking at the National Development Bank a premier bank in Sri Lanka. He was selected as one of the outstanding employees of the bank. Mr. Gunawardene also served a summer internship with Morgan Stanley in London in global equities risk management.

Mr. Gunawardene was a member of the Divisional Council of CIMA Sri Lanka for five years. For two years he headed its IT Centre Committee, which became one of its most active committees whilst during the last year he headed the Library Committee where he facilitated the establishment of an Information Resource Centre.

Mr. Gunawardene is a fellow of CIMA. He holds a MBA with merit from the Postgraduate Institute of Management, University of Sri Jayewardenepura, Sri Lanka where he has also served on its visiting faculty. Mr. Gunawardene also holds a MSc in International Securities, Investments and Banking with merit from the ISMA Centre University of Reading, UK. He is also a recipient of the Chevening Scholarship which is granted to 'mid career high flyers' globally by the British Government.

He is the son of the former Commander of the Sri Lanka Navy late Admiral Ananda Silva VSV and Mrs. Chitra Silva.

Mr. Gunawardene started his primary education at Sinhala Maha Vidyalaya, Jaffna, Sri Lanka and continued his schooling at Tissa Vidyalaya, Trincomalee, Sri Lanka and Defense Services Staff School, Wellington, India and St. Thomas' Prep. School, Kollupitiya, Sri Lanka. He completed his secondary education at Ananda College, Colombo, Sri Lanka.

...........................................
Lt. Gen.J.E.D.Perera
Chairman

Lt. Gen. Denis Perera has been appointed as Chairman of the Securities and Exchange Commission of Sri Lanka and the Insurance Board of Sri Lanka by the Hon. Minister of Finance.

Lt. Gen. Denis Perera joined the Sri Lanka Army in 1952 where he served in various regimental and staff appointments and in 1957 he was selected to attend a post graduate course at the Royal College of Military Engineering in UK. In 1961 he qualified to attend the British Army's Staff College from which he graduated.

Some of the subsequent appointments he held includes 3 years as Military Adviser to Sri Lanka's High Commission in London; 4 years as Commandant of the Army's Training Centre Diytalawa and Commander of the Army's Southern Command. In October 1977, at the age of 47 years Lt. Gen. Denis Perera was appointed Commander of the Sri Lanka Army. He was the first Sandhurst trained officer and first Engineer officer to hold this post.

When Honours and Awards were introduced to the Sri Lanka Armed Forces in 1980, Lt. Gen. Denis Perera was the first officer to be decorated with the Vishista Seva Vibushana (VSV) by H.E. the President for exceptional, distinguished and loyal service to the Nation. He retired from service at the age of 51 years after 32 years in the Army on completion of his statutory tenure of command.

Thereafter, Lt. Gen. Denis Perera was appointed High Commissioner for Sri Lanka to the South Pacific Regions with residence in Canberra. He returned to Sri Lanka in 1986 and H.E. the President appointed him to Chair a Committee of Service Commanders, the IGP and others to plan for National Service and advice on Manpower Mobilization.

In 1989 he relinquished his public appointments and joined the private sector where he held the following positions:

Lt. Gen. Denis Perera had his secondary education at St. Peter's College where he matriculated was a Prefect and a School Cadet. He represented the school at Rugby, Athletics, Tennis and Rifle Shooting.

In January 1991 at its first convocation, the General Sir John Kotelawala Defence Academy conferred on Lt. Gen. Denis Perera the honorary degree of Doctor of Letters for services rendered towards the National Security of Sri Lanka and for initiating and establishing the General Sir John Kotelawala Defence Academy.

He is currently a Vice President of the Organization of Professional Association (OPA) and was appointed by the Government of Sri Lanka to the Defence Review Committee in which he functions.

His association with the Institute of British Management goes back to 1963 when he was accepted as an Associate Member (AMBIM). In 1975 he was awarded Membership (MBIM) and in 1980 was designated a Fellow (FBIM).

In 1958 Lt. Gen. Denis Perera married Ranjini Perera and they have three sons.

Officer-in-Charge.


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The Securities and Exchange Commission (SEC), initiated an investigation into certain trades executed on the Colombo Stock Exchange in respect of Pure Beverages Co. Ltd.(PBC) shares on 29th January, 1993. The said investigation revealed that, Mr. Ana Punchihewa being the Managing Director of the company sold 20, 000 shares of PBC at Rs. 53.50 per share on the 29th of January 1993, immediately after the board meeting held on 28th January 1993, at which the accounts for the month of November and December were tabled. These accounts showed a significant loss of the company for the months November and December 1992. At the time Mr. Punchihewa disposed of his shares, the afforesaid price sensitive information was not disclosed to the public.

Charges were against Mr. Punchihewa for committing the offence of Insider Dealing. An offence under the SEC Act No. 36 of 1987 as amended, which reads as follows

Subject to the provision of subsection (8) and (9) an individual who is, or at anytime during the six months immediately proceeding the appointed date has been, connected with a company shall not trade in listed securities of that company if he has information of which,

(a) He holds by virtue of being connected with the company
(b) It would be reasonable to expect a person so connected and in the position by virtue of which he is so connected, not to disclose except for the proper performance of the functions attaching to that position; and
(c) He can be reasonably expected to know unpublished price sensitive information in relation to those securities”

The trial in this matter proceeded for almost three and a half years in the Fort Magistrates Court. In March 2000, Mr. Punchihewa requested the Comission to compound the offence against him in terms of section 51A of the SEC Act as amended.

The Commission having considered the facts and the circumstances in which the offence had been committed agreed to compound the said offence for a sum of Rs 481, 980/-, which was credited to the Compensation Fund of the Commission.

The case filed by the SEC in the Fort Magistrates Court was withdrawn by the Commission on the 21st June 2000.

Dr Dayantha C. Jayasuriya
Director General
For Securities and Exchange Commission of Sri Lanka.


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Securities & Exchange Commission (SEC) Act No 36 of 1987 as amended, in Section 25 requires a Licenced Stock Exchange, a Licenced Stock Broker or a Licenced Stock Dealer to inform the SEC and obtain its prior consent before it undergoes any change from its stake specified in the application for a licence as a Stock Exchange, Stock Broker or a Stock Dealer. A contravention of this rule is an offence punishable under the SEC Act.

Obtaining approval of the SEC in this instance is important to ensure that the criteria prescribed in the granting of a licence is continuously met by the company, and that good standards are maintained throughout.

CDIC Sassoon Cumberbatch Stockbrokers (Pvt) Ltd, (CDIC Sassoon), a Stock Broking Company licenced by the SEC was recently warned by the SEC for the contravention of this provision of the SEC Act. The firm was also cautioned that any further breaches could result in legal action being taken against the firm, and the firm's licence being cancelled/suspended.

SEC in July 1999 informed all the Stock Broking Companies including CDIC Sassoon of the importance of ensuring compliance with the relevant rule. SEC strictly warned CDIC in September 1999 for the same contravention.

Dr. Dayanath C. Jayasuriya
Director General
For Securities & Exchange Commission of Sri Lanka

30th June 2000




Securities & Exchange Commission (SEC) Act No 36 of 1987 as amended, in Section 25 requires a Licenced Stock Exchange, a Licenced Stock Broker or a Licenced Stock Dealer to inform the SEC and obtain its prior consent before it undergoes any change from its stake specified in the application for a licence as a Stock Exchange, Stock Broker or a Stock Dealer. A contravention of this rule is an offence punishable under the SEC Act.

Obtaining approval of the SEC in this instance is important to ensure that the criteria prescribed in the granting of a licence is continuously met by the company, and that good standards are maintained throughout.

CDIC Sassoon Cumberbatch Stockbrokers (Pvt) Ltd, (CDIC Sassoon), a Stock Broking Company licenced by the SEC was recently warned by the SEC for the contravention of this provision of the SEC Act. The firm was also cautioned that any further breaches could result in legal action being taken against the firm, and the firm's licence being cancelled/suspended.

SEC in July 1999 informed all the Stock Broking Companies including CDIC Sassoon of the importance of ensuring compliance with the relevant rule. SEC strictly warned CDIC in September 1999 for the same contravention.

Dr. Dayanath C. Jayasuriya
Director General
For Securities & Exchange Commission of Sri Lanka

30th June 2000






On the basis of the information obtained in the course of investigations hitherto conducted by the Securities and Exchange Commission of Sri Lanka (SEC), it has now identified five companies and two individuals as having “acted in concert” in acquiring shares of Sampath Bank Ltd., and thereby exceeded the threshold limit specified in Rule 31 of the Takeovers and Mergers Code of 1995, promulgated under the SEC Act No. 36 of 1987 as amended. The SEC has determined that the said threshold limit had been exceeded on or about 20th June 2000.

The five companies and the two individuals have now been called upon by the SEC to make a mandatory offer as required by the Takeovers and Mergers Code within the period of 35 days from 20th June 2000 as required by the said Code.

In terms of the Takeovers and Mergers Code 1995 any person or persons acting in concert with such person who acquires 30% or more of the equity shares of a Listed Company, is required to make a mandatory offer to all the remaining shareholders within 35 days of such acquisition at not less than the highest price paid by such persons to acquire these shares within the preceding 12 months. Further, the Code also requires that such offer shall also include a cash alternative where securities are being offered to the shareholders for accepting such an offer.

Dr. Dayanath C. Jayasuriya
Director General
Securities & Exchange Commission of Sri Lanka.



14th July 2000


THE SUPREME COURT HOLDS WITH THE SEC

In 1997 the Securities and Exchange Commission of Sri Lanka (SEC) prosecuted Kotagala Plantations Limited and its seven Directors for having failed to immediately notify its shareholders of the loss of control of a profitable subsidiary namely Agrapathana Plantations Limited, held through Lankem Plantation Holdings Limited. Kotagala Plantations Limited raised an objection that in terms of the applicable SEC rules, neither the Company nor its Directors can be prosecuted for the failure to make such disclosure considering the loss of control. The Court of Appeal upheld the order of the Magistrate in favour of Kotagala Plantations Limited. On an appeal filed by the SEC, the Supreme Court in its order delivered today, overruled the judgement of the Court of Appeal and directed the Magistrate to proceed forthwith with the trial. Pending the outcome of this case, the SEC had withheld action against a number of Companies and the Directors for the failure to immediately disclose material information to concerned shareholders. In view of the above decision, SEC will initiate relevant action.

Dr Dayanath C Jayasuriya

DIRECTOR GENERAL

January 31, 2001




PRESS RELEASE SEC COMPOUNDS KOTAGALA CASE FOR RS. 3.8 MILLION

The Securities and Exchange Commission (SEC) prosecuted Kotagala Plantations Ltd. and its seven Directors for failing to immediately notify the Colombo Stock Exchange concerning the loss of one of its subsidiaries. The Supreme Court recently held, reversing the judgement of the Court of Appeal, that the Securities and Exchange Commission is entitled in law to proceed with the plaint filed in Magistrate’s Court, Fort. Pursuant to this decision, the Company and its Directors made an application to compound the offence against them. Accordingly the case was compounded by Kotagala Plantation Ltd. by paying a sum of Rs. 3.3 Million to the Compensation Fund set up under the SEC Act. Each of the Directors compounded by making a payment of Rs. 80,000/- each to the said Fund.

Dr Dayanath C Jayasuriya

DIRECTOR GENERAL

08 June 2001

DE-REGULATION OF BROKERAGE COMMISSION
The Securities and Exchange Commission has finalized a survey on the De-Regulating of Brokerage Commissions. The contents of the survey have been circulated to the Colombo Stock Exchange and the Colombo Stock Brokers’ Association for comments with a view to moving towards the De-Regulation of Brokerage Commission in the Year 2000.



CHANGE OF SHAREHOLDERS OF T A SECURITIES (PVT) LTD.
The Commission has approved the purchase by D P M C Financial Services Ltd. of the shares of T A Securities (Pvt) Ltd., a licensed Stock Broking Company.

DE-LISTING OF AITKEN SPENCE HOTELS LTD.

In 1994 Aitken Spence Hotels Holdings Ltd. then known as Ahungalle Hotels Ltd. a Company listed on the Colombo Stock Exchange , made an offer to purchase the shares of Aitken Spence Hotels Ltd.z a Company listed on the Colombo Stock Exchange.

Consequently, 97% of the shares in Aitken Spence Hotels Ltd. were acquired by Aitken Spence Hotels Holding Ltd. 3% of the shareholders of Aitken Spence Hotels Ltd. dissented from accepting this offer.

Thereafter, in December 1998 Aitken Spence Hotels Ltd. forwarded an application to the Colombo Stock Exchange to be de-listed form the official list of the Exchange in terms of the Rules of the SEC. The price payable by Aitken Spence Hotels Ltd. to the said dissenting shareholding was determined by the Colombo Stock Exchange to be Rs.28/ per share, based on the price at which the shares of Aitken Spence Hotels Ltd. were trading during the preceding 3 months, in accordance with the De-listing Rules of the Securities and Exchange Commission.

The Securities and Exchange Commission received objections from certain shareholders of Aitken Spence Hotels Ltd. who were dis-satisfied with the price determined by the CSE. The SEC reviewed the pricing and acting in terms of Rule 6(4) (f)(iii) of the SEC Rules published in Gazette Extra-ordinary No. 709 dated April 3, 1992, arrived at a price determination of Rs.31/ per share.

Accordingly, Aitken Spence Hotels Holding Ltd. has agreed to the revised price of Rs.31/ per share and will offer to purchase the shares of dissenting shareholders at this price. All shareholders who have accepted the previous offer of Rs.28/- per share will also now be entitled to be paid 31/ per share.