Nation Lanka Finance PLC (CSF) divested the control of its equity brokerage, Nation Lanka Equities (Private) Limited (NLE), recently, to CSF’s former largest shareholder, Asanga Seneviratne. Seneviratne acquired 58.57 percent of the shares in NLE late last month with the approval of the Central Bank, for Rs.160 million.
As per the terms of the deal, Seneviratne will have to settle Rs.100 million of the purchase within one year, and the remainder upon the demutualization of the Colombo Stock Exchange (CSE). NLE is one of the 15 members of the bourse which has equal voting rights of the CSE. Demutualizing the CSE and making it a private company would provide NLE with shares and future profits of the bourse. Last December, the capital market regulator, the Securities and Exchange Commission (SEC), had issued a directive banning NLE from canvassing new clients due to continuous non-compliance with the SEC Act and the stockbroker rules and that NLE’s stockbroker licence is in danger of being not renewed if non-compliant with the directive.
However, NLE remains listed under the ‘Trading Members’ on the CSE website. Seneviratne had owned 32.82 percent of CSF shares until June 2015, when he divested his stake to a consortium of investors who had held minority shares in CSF, including the Dharmadasa family and Victor Ramanan. Following a rights issue of CSF in March, Ramanan owned 29.99 percent of the shares of CSF this June, while Harshith Dharmadasa owned 11.68 percent, J. Rudra owned 8.56 percent, Dharmadasa family-controlled Nawaloka Construction Company (Private) Limited owned 12.98 percent and Jayantha Dharmadasa owned 4.98 percent.