Securities and Exchange Commission (SEC) is said to be currently evaluating the legal options available to reverse the Rs.390 million controversial The FinanceNational Savings Bank deal, Mirror Business learns.
According to sources, during the meeting between the SEC and the director board of the Taprobane Securities, Dinal Wijemanne, Director and CEO of Taprobane Securities, who was also one of the selling parties of TFC shares to NSB, was believed to have told the SEC that he was willing to buy back shares from NSB.
Wijemanne, who was also a nonexecutive director of TFC sold 2.9 million shares of TFC to NSB on April 27, each share at Rs.50.
However, it is not yet clear as to the positions of other shareholders who along with Wijemanne sold TFC shares to NSB at Rs.50. The others who sold TFC shares to NSB were, Rayynor Silva, Nandadeva Perera, Yogananda Perera and Anura Fernando.
The total number of shares acquired by NSB from these sellers amounted to 7.8 million or 13 percent of TFC.
According to sources, the availability of laws regarding reversing or canceling a deal that has already taken place is doubtful.
“Before looking at reversing the deal, an investigation should be conducted into how this deal went through without the confirmation of NSB on T+1. The normal procedure is, if the Central Depository System (CDS) and the settlement bank don’t get confirmation from the buyer by T+1, the CDS will inform the buyer and cancels the transaction by transferring shares from CDS to suspense account of the broker.”
“In this transaction, the CSE did not cancel the deal by T+1. In addition, Sampath Bank being the settlement bank went ahead and paid the sellers, probably assuming that being a AAA bank NSB would honour commitments,” an analyst on the grounds of anonymity told Mirror Business.
In an earlier phone interview with Mirror Business, Renuka Wijewardena, General Manager, Regulatory Affairs at the CSE told Mirror Business that ‘NSB neither rejected nor confirmed the transaction by T+1’.
According to SEC chief Tilak Karunaratne, SEC has already started investigations into the broker as well as the CDS regarding any foul play related to the deal.
In a statement, NSB said that its director board has decided not to make the due payment related to the transaction on the grounds the return the investment would give the bank.