The move follows PCHH yesterday disclosing to the Colombo Stock Exchange that its Board has resolved to sell 100% stake of Beico Link Carbons Ltd (BCL) amounting to 5.7 million shares to M.M.D. Ventures Lanka Ltd for Rs.180 million to safeguard the business of BCL as a going concern business which has to settle dues to top urgent creditors.
To restrain this impending move in suspect of asset stripping, Adam Investments which this week triggered the SEC Takeovers and Mergers Code on PCHH by increasing the stake to 43%, prayed for interim order before Commercial High Court Judge L.T.B. Dehideniya.
The Judge considered submissions made by Adam Investments’ lawyers Harsha Amarasekera PC with Kanchana Peiris, the plaint, affidavit and the documents tendered that he was satisfied that unless interim orders were issued, the assets of PCHH will not be safe.
Therefore the Court intervened to take action to safeguard the assets of PCHH.
PCHH in its filing to the CSE said that its lawyers Nithi Murugesu and Associates had advised due to certain deficiencies in the application made by PC House Plc (founding shareholder of PCHH) to stop parate execution of the sale of several of the properties of PC House Plc and likelihood of not succeeding before the Supreme Court and thereupon banks foreclosing and this having effects on the entire Group (PC House, PC Pharma and PCHH), that it is important to dispose of assets within the PCHH Group to safeguard the business of Beico Link Carbon, as a going concern business which has to settle dues to top urgent creditors who had filed legal action and create sever hardships to the business of BCP and its employees.
PCHH said since DFCC Vardhana Bank has already sent Letters of Demand to BLC and the next cause of action is going to be the Parate Execution on the property mortgaged of BLC. “This action will have serious repercussions on the welfare of the company and its long standing staff. Since the Group has no financial stability to service the loans of BLC, the most appropriate option is to dispose BLC,” PCHH said in its filing to the CSE.