Daya Group in takeover bid on Blue Diamonds?

I n a n i n t e r e s t i n g development, the Colombo bourse was yesterday informed of the purchase of shares in Blue Diamonds Jewellery Worldwide PLC (BLUE) in excess of 10 percent by Promodya Manjaree Kilittuwa Gamage, who is believed to be the daughter of Primary Industries Minister Daya Gamage. A stock market filing by SC Securities said its client P.M.K. Gamage as at July 12, 2016, controlled 22,395,344 shares of BLUE, which represents 10.8 percent of the issued shares of the company. However, market sources said P.M.K. Gamage, who is believed to be acting in concert with Bimputh Finance PLC—a Daya Group company— may have held more than 15 percent of Blue Diamonds as at yesterday (July 14). As at March 31, 2016, P.M.K. Gamage held 2.77 percent of BLUE as the fourth single largest shareholder of BLUE and featured as the seventh largest shareholder of Bimputh Finance PLC with a stake of 7.57 percent.

The Securities and Exchange Commission has currently launched an investigation into Blue Diamonds of possible misappropriation of shareholder funds. BLUE currently doesn’t have a controlling shareholder, which makes it an open candidate for acquisitions. Chinese national Xia Liqiang, who currently functions as BLUE Chairman, holds 15.46 percent stake as the single largest shareholder of the company. He also holds another 10.56 percent stake through V.V.S. Lanka Holdings. Informed market sources said Daya Group has recently shown interest towards investing in a gem-cutting venture