Another ‘pump and dump’ story?

By Jithendra Antonio

Yet another ‘pump and dump’ story was unfurled following the release of quarterly results of People’s Merchant Bank (PMB), which showed advertising icon turned investor Dilith Jayaweera and corporate leader Nimal Perera have trimmed their shareholdings considerably.

It was reported that Emagewise’s Dilith Jayaweera bought 20 percent of PMB on June 10 in a surprising deal from Ishara Nanayakkara led Lanka Orix Leasing Company.

However, as per June 30, 2011 interim’s of PMB Dilith is not even listed among the top 20 shareholders of PMB as at 30 June 2011.

The deal was concluded at Rs.21 per share whilst Colombo stock investors aggressively bought PMB shares thereafter. As a result, the stock rose as high as Rs.42 and finally closed at Rs.30.10 and caught up with regulators 10% price band.

Meanwhile, the deal came at a time when Dilith Jayaweera controlled Emagewise was bullish and when it bought controlling stakes in Colombo Land (CLND) and in a listed hydro power operator Panasian Power PLC (PAP).

However, it was later speculated by market sources that Dilith sold part of its stakes in PMB and Panasian Power and several other listed securities in a bid to raise money for another major deal on a financial services firm which was later approached by another investor led by a platinum conglomerate.

In another development in 21 June New World Securities in a filing to stock exchange disclosed that Nimal Perera’s stake in People’s Merchant Bank (PMB) had increased to 10% with the acquisition of 3,013,100 ordinary voting shares.

However, according to June 33, 2011, Perera has only 3.69 percent or 1,383,200 shares of PMB.

source - www.dailymirror.lk