January, 4, 2016
If Entrust Securities PLC, a Primary Dealer of government security bonds in Sri Lanka, fails to submit its consolidation plans as called for to the Central Bank of Sri Lanka (CBSL) by 6.00 pm today (04 January), its management would be acquired under a state bank, said Central Bank Governor Arjuna Mahendran during a media conference today (04 January).
While stating that complaints have been already received by several parties against the activities of Entrust Securities PLC, he added that on 11 November 2015 the company was informed of steps to streamline its activities.
Accordingly, this company has to submit the plans to the CBSL by 6.00 pm today (04 January 2016). However, no such intimations have still been made to the CBSL by the company, the Governor said.
However, while speaking at the media briefing, CBSL Deputy Governor P. Samansiri said that this acquisition would in no way affect the company’s business activities.
“Sometimes, the shares prices of this company may rise due to this acquisition. Investor confidence will rise on a company being taken over by a state bank,” he added.
It was also revealed that there are several pending investigations into financial irregularities at Entrust Securities PLC. The Deputy Governor said that complaints have already been made regarding these to the police and the CID.
The government borrows by issuing government securities like Treasury Bills and Bonds through these Primary Dealers. The CBSL takes steps to prevent financial irregularities in such institutions.
However, this incident of a Primary Dealer being acquired by the government is the first in Sri Lanka’s history.
Initially beginning activities as Ceylinco Shriram, this company continued its business under the name of Entrust Securities.