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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Sri Lanka may be fast becoming the Hub Spot of Money Laundering in Asia - Commercial Credit Thai Company Deal worst than NSB-TFC Deal

Sri Lanka may be fast becoming the Hub Spot of Money Laundering in Asia - Commercial Credit Thai Company Deal worst than NSB-TFC Deal

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Equity Analytic
Equity Analytic

In recent times Sri Lanka seems to be becoming a Hub-Spot for Money Laundering in Asia besides country's finance minister continuously highlighting that various unknown and un-named investors from Kuwait, Saudi Arabia etc are coming with US $ 1 billion investments to the country from early 2015 soon after the new government came to power. Sri Lanka's Finance Minister Ravi Karunanayake himself is caught in a Money Laundering issue where the world's largest stock market manipulator now jailed in USa, Sri Lankan origin Raj Rajaratnam send Ravi Karunanayake a US $ 300 million to Sri Lanka's Standard Chartered Bank to buy Union Bank of Colombo's Shares. 

Associated parties Nexia Corporation, Linton Sirisoma and Ravi Karunanayake had thus been involved in money laundering by violating the regulations of the Central Bank and the Exchange Control Act according to legal authorities in Sri Lanka. They were charged with depositing three million US dollars in an account at Standard Chartered Bank and were then used to purchase shares in the Union Bank with the intention of laundering the money. 

Now it seems some Colombo Stock Exchange transactions happening under 'Yahapalanaya' too are more like Money Laundering when shares are trading at Rs.60 per share levels crossings are done at Rs.111 levels. 

[size=33]GL (SET:GL) Key Regional Investment Plans Get Shareholders' Green Light[/size]
ACN Newswire   
December 07, 2016 2:39am   Comments

BANGKOK, Dec 7, 2016 - (ACN Newswire) - Shareholders of Group Lease Public Company Limited ("GL", SET:GL), Asean's leading digital finance firm, gave approval to the proposal to acquire shares in two finance firms in Sri Lanka and Myanmar as part of its ambitious plan to become one of the "world-class" players.

With such approval, GL will acquire 22.27% shares in Commercial Credit and Finance PLC (CCF), a leading finance firm listed on Sri Lanka stock market, as part of the company's plan to acquire a total of 29.99% equity stake in CCF. The acquisition of the remaining 7.72% shares from its two existing shareholders - which does not involve connected transactions - is not subject to shareholders' approval.

Such acquisitions will boost earning's growth for GL from the profit sharing of around USD 7 million from CCF to be booked in Q4 and more to come next year and beyond.

The GL's shareholders also approved a proposed acquisition of all shares in BG Microfinance Myanmar Co., Ltd., a microfinance firm in Myanmar, to tap the high loan demand in the newly opened economy, as well as a proposed issuance of debentures to finance the expansion.

Mr. Mitsuji Konoshita, Chairman of the Board of Directors and Chief Executive Officer of GL, revealed the shareholders' resolution, at the company's extraordinary general meeting No. 2/2016 on December 6, 2016, to approve the proposed moves to expand the company's presence in the digital finance markets in the Asean and Asian regions, which will be the new engine of growth for the company. 

The acquisition will be made through Group Lease Holdings PTE. Ltd (GLH), a subsidiary registered in Singapore, buying 22.27% shares in Commercial Credit and Finance PLC (CCF) from Creation Investments Sri Lanka LLC (Creation SL). CCF is a leading finance firm listed on Sri Lanka's stock market with about one million customers and that will help GL to widen its geographical scope of operations beyond Asean to cover Sri Lanka, a growing South Asian market.

The 22.27% share acquisition will be part of the plan to hold a total of 29.99% shares in CCF, he said, adding that GLH has purchased the difference of 7.72% from two shareholders, i.e. BG Investments (PVT) Ltd. and Mr. Stephen L Lafrance Jr. The purchases, which were not connected transactions, did not require shareholder approval. 

The combined value of the investments in CCF will reach THB 2.514 billion (about LKR 10.58835 billion). The CFF investments will improve GL's performance beginning Q4 of 2016, as about USD 7 million (or about THB 244.6 million) will be posted as a profit sharing from CCF, whose profit for this year is estimated to be around US$22 million and around US$30 million for 2017.

The deal will also enable GL to have access to microfinance know-hows, which can be used to apply for credit expansions in Cambodia, Laos, Indonesia and Thailand.

Mr. Mitsuji added that GL's shareholders also resolved to approve a proposed THB 277.24 million acquisition, to be executed by GL and/or through GLH, of all 1,387,680 issued and paid-up ordinary shares in BG Microfinance Myanmar Co., Ltd. (BGMM), a microfinance firm in Myanmar, at about US$5.77 (about THB 199.79) per share.

The BGMM acquisition will allow GL to immediately expand microfinance business in Myanmar, a country with a population of more than 50 million and huge loan demand. The deal means there is no need for GL to go through the difficult process of applying for a new microcredit business license from the Central Bank of Myanmar. Having been in operation for more than two years, BGMM has nearly 10,000 customers and a loan portfolio worth more than US$1.2 million (about THB 41.9 million).

GL's shareholders, at an extraordinary general meeting, also approved proposed issuance of convertible debentures valued up to US$70 million to international investors on a private placement basis. Up to US$50 million convertible debentures will be allotted to JTrust Asia (JTA), a strategic partner in Indonesia, to finance expansions and secure working capital for GL's digital finance business, and US$20 million convertible debentures to Creation SL, a partner in Sri Lanka, to raise funds for continued expansion. The debentures will have a three-year maturity period and a conversion price of THB 70 per share.

"The shareholders' approvals will enable GL to increase its presence across the Asean and Asian regions at rapid rate and reach its performance goals and become a world-class digital finance firm," said the CEO.

About Group Lease PCL

Group Lease Public Company Limited was established on 6th May 1986 and listed on the Stock Exchange of Thailand in 2004 (SET:GL). The company has expertise in hire-purchase of motorcycles, as it has been in the motorcycle leasing business for over 20 years, with motorcycle brands for financing including Honda, Yamaha, Suzuki, Kawasaki.

In 2007, the APF group became the major shareholder holding around 65% of total shares. In 2012, GL announced a long-term business plan to become the leading finance company in the Southeast Asian region. To do so, GL formed Group Lease Holdings Pte. Ltd. (GLH), a Singapore holding company, as headquarters for its expansion in other countries. For more information, please visit

Group Lease Public Company acquires 29.99% of Commercial Credit and Finance PLC for over Rs. 10.56Bn

BG Microfinance Myanmar for acquired for USD 8.0m
Colombo. Thursday 08 December 2016. In what has been described as a historic financial transaction, Group Lease Public Company Limited (GLPCL), a digital finance company listed on the Stock Exchange of Thailand (SET), acquired a stake of 22.99% stake in Commercial Credit & Finance Plc (CCF) for USD 70 million on the CSE. The transaction valued at over Rs. 10.56 Billion is one of the highest recorded on the CSE.
In the same exercise, BG Investments (Pvt.) Ltd and related companies along with CCF sold 100% stake in microfinance subsidiary in Myanmar - BG Microfinance Myanmar Co Ltd (BGMM) - for a consideration of USD 8.0m to GLPCL. The CCF stake of 28.1% was valued at USD 2.284 Mn and works out to Rs. 330 million at the current exchange rate of Rs. / USD 146.85. CCF will book a profit of Rs. 277.21 million before taxes on the transaction.
“First announced in September this year, the former is a historical transaction in terms of size. Two years ago, the investment of Rs. 1.68 billion (US$12.8 million equivalent) by Creation Investments Sri Lanka LLC was the biggest foreign investment into a finance company. Commercial Credit is very happy to partner with GLPCL where we see a long term win-win partnership through this investment with many opportunities for capital raising, synergies and growth”, said Commercial Credit’s Chief Operating Officer Rajiv Casie Chitty.
GL’s Chairman/CEO Mitsuji Konoshita sees this decision to buy 29.99% of Commercial Credit & Finance Plc (CCF) as one which will further enhance the strategic partnership between the two groups. “We look to combine our efficient digital finance platform with CCF’s very successful track record in the field of finance, to grow our businesses in all markets where we are and will be present, while CCF’s need to access to capital can easily be met by our capability to raise funds internationally”.
The acquisition valued at USD 70 million marks GL’s first major expansion outside of the ASEAN region. From its home base in Thailand, GL has expanded successfully into Cambodia, Laos, Indonesia and, more recently, Myanmar through BGMM.
With a history of 34 years, Commercial Credit and Finance PLC is one of Sri Lanka’s leading finance companies with a total asset base of Rs. 70 billion as at 31 March 2016. It is listed on the Colombo Stock Exchange.
CCF offers a wide portfolio of products and services including Fixed Deposits, Savings, Leasing, Hire Purchase, Education Loans, Real Estate, Term Loans, Gold Loans, Revolving Business Loans, Factoring, and Microfinance products which are offered in over 120 locations across the country. Upgraded branch facilities and cutting-edge marketing strategies continue to garner the Company a rapidly expanding and loyal client network. 



Dear Turnbull,
So, what you mean is another hub added to the long list of hubs that we are going to be and that's 'Money Laundering Hub'.Sri Lanka may be fast becoming the Hub Spot of Money Laundering in Asia - Commercial Credit Thai Company Deal worst than NSB-TFC Deal Icon_biggrin

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