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Mar 05, 2017
ECONOMYNEXT - Sri Lanka's Colombo Stock Exchange has introduced a facility to sell large stakes in companies as single blocks which can be used to sell off state enterprises, the regulator said.
The Securities and Exchange Commission said it has approved changes to the rules of the automated trading system and central depository to allow for 'all or none' (AON) parcels to be traded.
"In the wake of the Government's programme to restructure State Owned Enterprises (SOEs), the AON method can be a medium through which strategic stakes in Government owned entities can be transacted in a transparent manner in a competitive environment," the SEC said.
At least 10 percent of a company has to be placed on the board to quality for the AON trading. A consortium of investors can also bid for an AON parcel.
A block of shares will be kept open for three days.
Several Sri Lankan state firms including the Distilleries Corporation of Sri Lanka were sold on the stock exchange during the Ranasinghe Premadasa regime.
Placing stocks on the stock exchange cut out back-door negotiations which can involve corruption or the giving of concessions and monopolies and the buyers. (Colombo/Mar05/2017)