Claridge Stockbrokers' licence in the balance

Sri Lanka's stock market regulator is to take action against Claridge Stockbrokers, part of Mackwoods Group over non-compliance with the broker’s licence now hanging in the balance, informed sources said.

This drama started when Claridge brokered the sale of a 60.8 per cent stake in Agalawatte Plantations PLC owned by Mackwoods Plantations Pvt Ltd to Browns and transferred the sale money to the latter despite the Securities and Exchange Commission (SEC) issuing a directive suspending this particular sale.

The SEC after the investigation had decided to get tough with Claridge, the sources said. They told the Business Times Claridge's licence was up for renewal in October and since this investigation wasn't completed at the time, SEC decided to extend it at the last SEC meeting by another month. Now it's at a stage that this licence will be suspended, they added. “This will be coming up at this week’s SEC meeting,” a source said.

In the midst of a family feud over ownership of the Mackwoods Group between its Chairman Chris Nonis and related parties and his sister Nirmalie Samaratunga and connected parties, SEC was very critical of Claridge at the start of this dram. It said in a public statement that the sale

The SEC after the investigation had decided to get tough with Claridge, the sources said. They told the Business Times Claridge's licence was up for renewal in October and since this investigation wasn't completed at the time, SEC decided to extend it at the last SEC meeting by another month.

of the controlling stake in Agalawatte Plantations (to the Browns Group) was in violation "of the written instructions issued to Claridge" and contrary to a directive issued by the SEC is a serious breach of discipline and a matter on which the SEC takes very serious cognizance. "Your conduct is aggravated by the fact that Claridge Stockbrokers Pvt Ltd is a company in which Dr. Chrishantha Nonis has an interest," the statement said.

Meanwhile Dr. Nonis has retaliated for a second time on this issue with the SEC. The source added that he has sent a ‘stinker’ to the SEC saying that they have done wrong by him. It remains to be seen how the SEC will perceive this as it’s now all-out war between the regulator and Mackwoods.