Supreme Court upholds SEC ruling against Vidullanka CEO

Sri Lanka’s Supreme Court on Tuesday (11) dismissed an appeal by Riyaz Mohamed Sangani, Managing Director and CEO of Vidullanka PLC, against a Court of Appeal ruling in favour of the Securities and Exchange Commission of Sri Lanka (SEC).“The decision upholds the lower court’s order, reinforcing the SEC’s position in the case,” the SEC said.

Further details on the ruling were not immediately available.The case was heard before a three-judge bench comprising Justice Yasantha Kodagoda, PC, Justice Sampath B. Abayakoon and Justice M. Sampath K.B. Wijeratne.

The capital market regulator shared that in 2023, pursuant to an application made by Sangani, the SEC had provided him with an opportunity to compound the four offences committed by him under Sections 32(1) and 32(6) of the then SEC Act, imposing a penalty of Rs. 3 million per offence, which amounted to a total of Rs. 12 million for insider dealing in the shares of Vidullanka PLC.

Sangani filed a writ application in the Court of Appeal, against the above decision of the SEC, seeking a Writ of Mandamus to compel the SEC to compound the four offences at a lesser amount. He had argued that the quantum of the penalty was arbitrary, capricious, and unreasonable, rendering it ultra vires the SEC’s powers.

However, the Court of Appeal ruled in favour of the SEC’s decision, in arriving at a finding that Sangani had failed to establish a prima facie case for judicial review and dismissed the application.

The Supreme Court upheld the decision of the Court of Appeal on 11th March, reinforcing the SEC’s authority in determining penalties for securities violations and affirming its regulatory mandate in ensuring market integrity.
Chandaka Jayasundara PC appeared for the petitioner Sangani and Vikum de Abrew PC appeared for the respondents.