The above stories give confidence to the public. The papers have not reported the relevant fact that George Steuart Finance has reported a loss of Rs. 6.8 million for six months to 30th September 2013 and a bigger loss of Rs. 12.2 million for three month to 31st December 2013. Total loss for the 9 months is Rs. 19 million. This is a bad sign of things to come. Please see the accounts on the Colombo Stock Exchange.
Their interest expenses as a percentage of interest income has increased to 56 per cent in the 3 months ended 31st December 2013 compared to 25 per cent in the same quarter of 2012 in a reducing interest rate scenario. This indicates more loan defaults as interest on non-performing loans cannot be recognised.
Net assets of the company have come down to Rs. 305 million and Net Assets per share to Rs. 13.60. However these shares have been transacted at very high prices at Rs. 495, Rs. 550, Rs. 650 and even Rs. 1,500. How were such shares priced at such high prices? Today there are buyers for small quantities at Rs. 350.
Dilith Jayaweera is Chairman of George Steuarts. His company, Divasa Equity, owns 51 per cent shares and Nalaka Godahewa, Chairman SEC owns 5 per cent of the shares. Capital Trust Holdings owned by Thushan Wickremasinghe, a well-known stockbroker owns 25 per cent of the company.
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