4 May 2016 10:11 am
Kelsey Home Developments PLC, a Schaffter family company yesterday disclosed to the Colombo bourse a related party transaction of material nature, which should have ideally been disclosed as way back as in December 2014.
The company said its fully owned subsidiary Kelsey Homes bought a land in Minuwangoda Road, Negombo for a total consideration of Rs.487 million from Dinesh Schaffter, his spouse, Tarni Schaffter and, Manjula Mathews on December 19, 2014. According to the company’s 2014/15 annual report, Manjula Mathews functions as the Chairman of Kelsey Development PLC while Dinesh Schaffter serves as Managing Director.
“Dinesh Schaffter and Manjula Mathews are considered as a related party as they are key management personnel of Kelsey Homes (Pvt) Ltd. This transaction exceeds 10 percent of the equity of the listed entity Kelsey Development PLC and therefore requires immediate disclosure,” a company filing said.
“The disclosure was not made in December 2014 due to an oversight,” it added. As the company has very rightly mentioned, the deal should have been immediately disclosed. However since the word ‘immediate’ is not properly defined either in Listing Rules or the Company’s Act, some of the listed firms appear have taken the liberty to interpret the word as they see fit. Mirror Business has several times pointed out how the Colombo bourse and market regulator need to step up their game by plugging the regulatory loopholes as timely dissemination of information ensures fair play in a disclosurebased market.
“Under the terms of the transaction, an upfront payment of Rs.300 million will be made to owners of the property and balance to be repaid from sales proceeds. Further, the owners guarantee a profit of Rs.150 million to the company from the sale of the property,” the disclosure said.