Probably in a first in the history of the Colombo Stock Exchange (CSE), the controlling shareholder of a listed company plans to vote against an already declared dividend payment by the firm’s board of directors, at the upcoming AGM.
Overseas Realty (Ceylon) PLC, the owners of the World Trade Centre, in a stock exchange filing said its Singapore-based majority owners intended to vote against a resolution for the payment of a dividend for 2019, which was recommended by the board on February 18, 2020.
The company on February 19, in a CSE filing announced a cash dividend of Rs.1.25 per each voting share.
“The board of directors of Overseas Realty (Ceylon) PLC wishes to disclose that it has received a communication from Shing Kwan Investment Company Limited, Unity Builders Limited and Shing Kwan Investment (Singapore) Pte. Ltd, Shing Kwan (Pte.) Ltd and Peeli Limited, who collectively own 82.4 percent of the ordinary voting shares of the company that they intend to vote against the resolution for the payment of a dividend for 2019, which was recommended by the board on February 18, 2020 and disclosed to the
Colombo Stock Exchange on February 19, 2020,” Overseas Realty said in a stock exchange filing last Friday.
“The board of directors therefore believes that the resolution for the approval of the said dividend will be defeated at the Annual General Meeting of the company, scheduled for June 25, 2020,” it added.
The decision to object to the cash dividend payment is likely due to the expected challenging environment in the local real estate sector, stemming from the economic impact of COVID-19.
Overseas Realty (Ceylon) PLC reported a 30.1 percent less profit for the quarter ended March 2020, driven by a sharp decline in apartment sales and a modest decline in rental income.