Letter to the Editor: Delisting Expolanka Holdings’ shares from Colombo Stock Exchange

I refer to the article published in your paper on March 14, 2024, written by S.V.S. Fernando of Dehiwela, citing several factors as to why an upward revision of the exit price offered by the company should be considered. I totally agree with the contents of the article.

I read a number of articles published in several other papers in favour of the exit price offered, from the time the announcement was made by the company. One such article indicated that the price hike during the COVID period was once in a lifetime occurrence. Another predicted about a lower market value of the share, if the delisting offer is rejected. It was also highlighted that the settlement money to the tune of Rs.69 billions will be a boost to the national economy and liquidity of the share market. I agree to some degree with the first and the last comments.  

How can someone predict a lower market price, if the delisting offer is rejected? The dormant economy is poised to perform well, once the third tranche of the International Monetary Fund package is released, debt restructuring is finalised and the boom towards the third quarter of the year, with the pending General Elections. Who will know when the crisis in the Red Sea would be resolved? If it aggravates, the sea/air freight charges, which have already soared, will naturally increase the bottom line of 
the company.

It is learnt that a good number of investors have bought shares between Rs.200 and Rs.300, after the financial crisis, in view of the publicity given by the company in the media on a number futuristic investments made by it. I regret to note the concerns made by the interested parties without being mindful of the massive capital losses to be incurred by the loyal investors, who believed in the reputation of the company and the strong envisaged performance 
in the near future.

The company would not delist its shares and register itself in a strong established stock exchange, if the future prospects are bleak. Who will buy the shares of a worthless company, with poor performance?

It is quite understandable why a few brokers are trying their best to deceive the investors by showing an altogether negative scenario. They may be starving for their bread and butter in a rather poor stock market, where the turnovers were low during the past two years. When the country is on the verge of reviving the economy, no one is expected to be negative and spread misinformation.
I feel Expolanka Holdings too has announced the delisting of the shares with a low exit price, at the most advantageous time to it.

It is true that even if half the settlement funds are reinvested in the stock market, it will be a boost. But at whose expense? It is the primary duty of all brokers to look after the interests of their own investors as well as the total investor community. No one can expect the company to relieve the burden of all investors, especially those who have bought at premium prices of over Rs.350, at the peak, of course, with the blessings of their brokers.
However, a reasonable upward revision of the exit price would not be a total let down to the loyal and long-standing investors. It would be a win-win situation for both sides.

I only hope that no one will stoop to low unethical practices to woo the investors with meagre investments of less than around 200 shares, to achieve their selfish goals. The company should be mindful of the repercussions of achieving its target at any cost, with grave losses to its shareholders, as there may be a possibility of the company facing a reputational risk.

Sreema Fernando
Dehiwela