SEC says Kelsey Development’s late disclosure was not voluntary

Capital Market watchdog Securities and Exchange Commission (SEC) says the late disclosure made by Kelsey Development PLC, a Schaffter family company, was not a voluntary move by the company but the result of a regulatory intervention. 

Kelsey Development on May 3, 2016 disclosed to the Colombo bourse that its subsidiary company Kelsey Homes bought a land in 2014 December for Rs.487 million belonging to its Chairman, Managing Director and his wife. 

The company said a disclosure pertaining to this was not made “due to an oversight.” 

In a letter to Mirror Business story titled “Better late than never” appeared on May 4 highlighting this, the SEC said the related party transaction, which had not been disclosed to the market, was uncovered during a routine review of annul reports of listed firms by the SEC and the Colombo Stock Exchange (CSE) for non compliance. 

“Whilst reviewing the annual report for the year ended 31st March 2015 of Kelsey Developments PLC the SEC detected an instance of suspected non compliance pertaining to the non disclosure of a related party transaction in accordance with Section 8, Appendix 8A of the Listing Rules of the CSE. i.e. the purchase of land by  Kelsey Homes (Pvt) Ltd from certain key management personnel. 

The SEC by its letter dated 23rd March 2016 sought clarifications from the company regarding the aforementioned instance of suspected non compliance. Subsequently, the company by its letter dated 12th April 2016 to the SEC, accepted that due to an oversight the company had not made the relevant disclosures. Thereafter, the SEC by its letter dated 20th April 2016 requested the company to make an immediate market disclosure and ensure compliance with the Listing Rules of the CSE.

Consequently, by its letter dated May 3, 2016 the Company made a disclosure to the market indicating the required details pertaining to the transaction and accepting non compliance due to an oversight,” the SEC letter dated May 6, 2016 noted. 

“In this light, we hope that you will appreciate the prompt action taken by the SEC to ensure a fair and orderly market and once again commend your Newspaper for its responsible and investigative journalism which has assisted the SEC to enhance its regulatory oversight,” the letter added.