Continuous disregard of rules irks CSE

Are rules meant to be followed or broken? It’s a billion dollar question in the case of certain listed firms at the Colombo Stock Exchange (CSE).

For instance CSE rules say that within two (2) market days any information pertaining to the financials of a listed firm should be disclosed to the CSE. But yet, there’re errant firms who fail to follow this ‘ simple’ rule.

A sale of 9.9 per cent stake on August 31 was communicated to CSE only after two weeks. The CSE when contacted said they’re in touch with the particular firm. “We wrote to them for an explanation,” a CSE source told the Business Times but declined to say what happened afterwards. Anyway it was clear that this behaviour has annoyed them. The authorities are also having some issues in terms of Section 7.8 of the Listing Rules of the CSE, which specify immediate disclosure pertaining to a firm’s share dealing. The CSE has seen instances where they aren’t immediate and has had ‘oneto-ones’ with certain offenders who complied after many ‘calls’ threatening them to meet the terms, officials said.

This particular instance was a 178,931,037 share transaction. Directors of the holding company who are also directors in the particular firm effected the sale.

The CSE will be scrutinising firms in future pertaining to such instances and the new regulations will deter offenders from delayed disclosures, officials added.

The CSE is a disclosure based environment where public companies are required to disclose meaningful financial and other information to the public as it provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell or hold a particular security. Only through the steady flow of timely, complete, and exact information can people make sound investment decisions, analysts said.