PDL will be delisted, eventually

Despite shareholders ‘nay’ to delisting to Property Development PLC (PDL) from Colombo Stock Exchange (CSE), at an Extra Ordinary General Meeting held recently, CSE – according to its latest rules - will eventually do so, CSE officials noted.

PDL in a stock market filing said a resolution towards delisting the shares of the company was not passed by the shareholders last Wednesday amidst questions by minority shareholders of PDL about the low rental rates the company had been charging from Bank of Ceylon (BoC). The principle business activity of PDL is to own, maintain and manage the Bank of Ceylon (BOC) headquarters building, which the company has rented to BoC.

CSE officials told the Business Times that PDL has not complied with CSE's minimum public shareholding requirements and that they will be following the due course of action in this regard, which would see PDL being delisted in the long run.

The majority shareholder, BoC has 95.55 per cent in PDL leaving the public float at an alarming, less than 5 per cent. The Securities and Exchange Commission last year tightened the noose on listed companies not adhering to norms with regard to minimum public shareholding. Companies found non-compliant with the minimum public holding requirement as of July 1, 2017 were transferred to CSE’s Watch List on July 1, as directed by the SEC. As at this January, 59 listed companies were non-compliant with the minimum public float rule of the CSE. Of this, between 30 to 40 firms are likely to exit the exchange through this mechanism which is meant to weed out bad eggs, officials say.

The PDL EGM followed PDL's stock market filing on February 9 communicated to the market a decision made by the PDL director board to de-list the shares of the company subject to shareholder and regulatory approval. This announcement also offered the BoC to acquire the balance shares of the minority shareholders who may wish to divest at a price of Rs.123 per share – in anticipation of the minimum public holding requirement rules being enforced.