What follows is the last of many emails to the CSE, CBSL, Company Secretary, Respective Chairmen, and Department of Registrar of Companies to delay an amalgamation of two companies. Namely Richard Pieris Finance and Chilaw Finance. The manner in which it was done saw shareholders lose their stake and be paid a consideration in compensation. This was not an amalgamation and saw the delisting of a finance company. This was one of the first times I had looked into the Companies Act of 2007. I made a small but below fixed deposit rate of return on this.
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The amalgamation of Richard Pieris Finance and Chilaw Finance was to take place by the latest on 31st March 2017 as outlined in the letter referenced 24/03/005/0052/003. I am yet to be paid my consideration of 22.50 per share for my holding in Chilaw Finance. I have been told by Ms Jayalatha Siriweera’s secretary (Richard Pieris Group Secretaries) that I shall not be given interest on my delayed payment if even that is to happen. I have protested the proceedings for quite some time now and am yet to receive any response from the CSE, CBSL, Chilaw Finance, and or the Richard Pieris Group. Any amalgamation at this point in time would require an extension of approval by the Central Bank and shall need to go through a fresh shareholder approval process whereby we as shareholders are given time to consider the matters as they stand. I urge the company registrar to go through the amalgamation documentation.
Let me start by saying that I am a shareholder. I own shares in Chilaw Finance. This is not constrained to a right to sell my share in Chilaw Finance. It is more than an option to sell. As shareholders in Chilaw Finance we must now consider whether it is in our best interests to merge with Richard Pieris Finance. In my opinion the actions of Richard Pieris show clear disregard for the spirit of the law. The lack of response by all the agencies copied is symbolic of the state of shareholder rights in Sri Lanka.
My proxy vote form was not accepted on grounds that a sense of due and fair process was not present. I was under the impression that one of the directors would fill this void as it is written in the form and vote on my behalf. It is my understanding that employees of Richard Pieris Finance were aware of my displeasure of the amalgamation procedure and my potential vote against the proposal. As such I would say that they were aware of my dissenting views.
As previously stated my understanding of the company’s act is that Section 92 would give me the right to approve an amalgamation. What is ensuing can only be defined as a buyout which only by some creative interpretation of words could then be considered an amalgamation. Section 99 would protect the rights of my share which includes my right to voting and distribution rights. This in normal course would be overridden by section 101 which invalidates the prevention of an action solely on the grounds of section 99. I however have been robbed of my rights in section 92 by the non-acceptance of my proxy form, Section 49 (4) wherein no share shall have a nominal or par value, and section 99 wherein I lose my rights to both distribution and voting I feel there should be room for me to contest the proceedings.
I have already written to the company and asked that my shares be purchased as I have clearly not supported the motion at the extraordinary general meeting within the stipulated time frame. I did not receive any correspondence to my request.
This is only compounded by the fact that the AMALGAMATION HAS NOT HAPPENED. This is as outlined in the Circular to the Shareholders point (2) second paragraph. Please find said text below.
(2) Amalgamation Proposal
Upon payment as aforesaid, all the shares (100%) of CFP will be cancelled effective on the “Date of Amalgamation” as pert the Certificate of Amalgamation to be issued by the Registrar General of Companies, and thereupon CFP shall cease to exist. According to the approval granted by the Monetary Board of the Central Bank of Sri Lanka as set out in letter dated 5th December 2016 ref.24/03/005/0052/003, the amalgamation is required to be completed by 31stMarch 2017.
I obviously want to be compensated for the way in which I have been wronged. I also want the price per share to be more reflective of what in normal course would be the fair value of the share or to get shares in the amalgamated company. We must start afresh and the authorities should now take steps to safeguard the assets of Chilaw Finance. I was wondering if you would also be able to assist me in finding the Right To Information officer within the Company Registrar.