Rajarata entrepreneurs enthusiastic about possibility of listing on CSE
Tuesday, 7 October 2014 00:03
Members of the business community in Anuradhapura showed an avid interest regarding the possibility of raising capital through a listing on the Colombo Stock Exchange (CSE), at a forum held recently to create awareness on the benefits of going public amongst entrepreneurs.
The issuer relations forum, held on 29 September at the Heritage Hotel Anuradhapura, which was jointly organised by the Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) in association with the Chamber of Commerce Anuradhapura, saw the participation of over 20 members of the business community from the region.
The program began with a presentation on the benefits of listing both equity and debt on the CSE by Renuke Wijayawardhane, Chief Operating Officer (COO) of the CSE. It was followed by a panel discussion, where many areas relating to the listing process was clarified to the audience, while clarifying a number of commonly held misconceptions about listing on the CSE.
The panel comprised of the Chairman Raigam Wayamba Salterns PLC Dr. Ravindranath Liyanage, Wijewardane and SEC Director Corporate Affairs Harshana Suriyapperuma. During the discussion a number of key questions were posed by the audience to facilitate a lively and informative dialogue.
“There are a number of myths about the drawbacks of listing; chief among them is the idea that being a listed entity will result in a loss of control for the existing shareholders of the company. However, this is not the case because, as a company listed on the Diri Savi Board you need to have only 10% of your total shares in the hands of the public and on the Main Board the public holding requirement is only 25%. This is more than adequate to retain the control of the company, even after listing. It is also vital to remember that there is no loss of confidentiality or competitive advantage by listing,” Wijewardhane said in his opening remarks.
Suriyapperuma said: “IPOs facilitate wealth creation for the promoters of the business and within a fairly regulated framework, entities are able to ensure good corporate governance and be transparent. Through the said framework investors are provided with timely disclosures to make appropriate investment decisions. This disclosure centric framework provides the opportunity, to the management of a business to effectively comply with regulatory requirements which are both business and investor centered.
In this process the element of investor confidence is upheld, which will allow long-term development of the business as well as the capital market. Budget concessions obtained were also explained to participants; including the 50% tax reduction for new listings subject to meeting them meeting the set-out criteria.”
Expanding on the benefits of listing, through the experience of Raigam Wayamba Salterns, Dr. Liyanage explained: “When Raigam decided to list, one of the primary reasons for this decision was the guarantee that being listed would ensure an objective value to the company.”
He further related the process of thought that goes through the minds of an entrepreneur prior to listing: “Most people are worried that they will have to share their ownership by diluting shareholding.”
However, he affirmed that the benefits of sharing ownership with the public have outweighed any anxiety of listing.
Participants were interactive and engaged with Dr. Liyanage who shared in-depth his experience of listing on the Exchange.
Members of the Anuradhapura Chamber of Commerce as well as the entrepreneurs of the region who participated at the Forum were delighted to learn about listing on the CSE as a very viable method of raising capital.