SEC blocks completion of Industrial Asphalts mandatory offer over Director’s share transfer

Wednesday, 16 September 2026 00:22 - - {{hitsCtrl.values.hits}}

The Securities and Exchange Commission of Sri Lanka (SEC) has blocked completion of the mandatory offer for Industrial Asphalts (Ceylon) PLC (IAC) by refusing to approve the transfer of shares held by an IAC executive director, pending the company’s removal from the Colombo Stock Exchange’s (CSE) Watch List, according to a closing statement filed with the CSE.

The voluntary offer by Arcasia Investment and Trading Ltd., and ATX Partners Ltd., which was subsequently converted to a mandatory offer, commenced on 21 August 2026 and closed on 12 September 2026. Under the offer document dated 19 August 2026, completion was conditional on the offerors acquiring more than 50% of IAC’s shares.

Valid acceptances totalling 1,880,693,010 shares, or 50.16% of the company, were received by the closing date, satisfying that condition. The acceptances came from only two shareholders, Ramanan Govindasamy and Srikumar Balasubramaniyam, who had entered binding agreements to sell their shares under the offer.

However, after the acceptances were received, IAC’s shares were transferred to the CSE’s Watch List on 7 September 2026 due to the non-submission of its Annual Report for the financial year ended 31 March 2026. As Govindasamy is an executive director of IAC, Listing Rule 7.5.e.(i)(7) bars him from transacting in the company’s shares, directly or indirectly, while they remain on the Watch List, unless the SEC grants prior approval.

In a letter dated 11 September 2026, the SEC informed the offerors that such approval would not be granted until IAC remedies the non-compliance that led to its Watch List placement, effectively stalling completion of the offer despite the acceptance threshold having been met.