Default Board listings decrease

Hiran H. SENEWIRATNE

The number of listed companies, which are under the Default Board (DB) of the Colombo Stock Exchange has come down to 13 from 22 companies with the introduction of new rules and regulations for the Default Board since April 2007, Colombo Stock Market sources said.

DB is the transfer of companies that violate or do not comply to listed rules in the stock market. Therefore, with the new rules and regulations for the Default Board many companies have become cautious and tend to be in compliance and adhere to stock market rules, its sources said.

Prior to transferring the securities of the company to the DF, the CSE informs the company in writing of the default and the securities of the company will be transferred to the DB, in the event of any violation and/or non-compliance with any of the listing rules of the CSE by any entity whose securities are listed on the Exchange, CSE sources said. The CSE will also transfer the securities of such entity to the DB and may publicly reprimand such entity and/or suspend trading of securities of such entity for any period of time and/or de-list the entity from the official list.

If an entity fails to pay interest on the debt securities listed on the CSE on the due date, the securities shall be transferred to the DB. If the company continues to be on the Board for a period in excess of three months from the date of transferring the securities of the company to the Default Board, the CSE at its discretion may refer the matter to the Securities and Exchange Commission, a senior official of the CSE said.

The listed companies in the Default Board are Hotel Developers (Lanka) Plc, Colombo Fort Land and Building Co Plc, Vanik Incorporation Ltd, Alufab Limited, Infrastructure Developers Ltd, Ferntea Ltd, Lanka Cement Ltd, Asia Capital Plc, Ceylon Hotel Corporation Plc, Ceylon Theatres Limited, Miramar Beach Hotels Limited, The Lanka Hospitals Corporation Limited and Cargills (Ceylon) Plc.