Expolanka delisting faces fresh legal hurdle in Court of Appeal

• SEC, CSE and Attorney General cited among 13 respondents by group of minority shareholders
• Court orders respondents to file limited objections by 29 May
• Fresh litigation comes after the previous case prior to EGM was dismissed by Court

Some of the minority shareholders of Expolanka Holdings PLC on 22 May filed a Writ application before the Court of Appeal seeking an order to quash approval given by the Securities and Exchange Commission (SEC) to delist the Company’s ordinary shares from the Colombo Stock Exchange (CSE).

The Petitioners also sought relief against the SEC and 13 other respondents including the CSE, Expolanka Holdings PLC and SG Holdings Global Ltd. Further petitioners alleged that there was no appeal hearing by the SEC against the complaints served and direct rejection of the appeals by the SEC will not serve to preserve shareholder rights. 

Therefore, they demand to conduct investigations on irregularities, and violations against SEC regulations by Expolanka during the EGM and also unfair delist offer price of Rs. 185 for the long-term shareholders. The Petitioners specifically sought further relief against the CSE and sought to prevent the suspension of the share trading by the CSE until a detailed investigation was completed by SEC. 

The Court of Appeal previously received a Writ application filed by three of the petitioners before holding the Expolanka’s Extraordinary General Meeting (EGM) on 26 March. The court previously dismissed the case noting that there is an alternative remedy available for the Petitioners via appealing to SEC and were also of the view that the Petitioners have not established a case warranting issuance of notice and dismissed the application on the first day it was taken up in Court for support. 

Nevertheless, Petitioners in their 22 May Writ application alleges that the SEC has failed to give hearings or reasons pertaining to the appeals lodged by the Petitioners against the delisting procedure adopted by the Expolanka Holdings PLC. Petitioners further alleged that they have complained to the SEC that delisting rules of the SEC have been violated pertaining to casting and counting of minority shareholders votes at the EGM. 

On 22 May when the matter came up before the Court of Appeal, the court directed the petitioners to re-issue notices to the respondents and the court further ordered respondents including the Attorney General who appeared on behalf of the SEC to file limited objections by 29 May. The matter will be mentioned again before the court of appeal on 31 May to support the main application of the petitioners and the interim reliefs prayed therein.

Expolanka Holdings, a global logistics leader, on 1 March announced its voluntary delisting from the Colombo Stock Exchange with the majority shareholder extending a share buyback offer at Rs. 185 per share. With a market capitalisation exceeding Rs. 294 billion, Expolanka stands as the most valuable company listed on the CSE. The SEC approved the delisting application by Expolanka Holdings PLC for delisting ordinary shares from the CSE official list of the CSE on 7 May.