Sri Lanka SEC freezes payment to Chinese investor over suspect stock deal
ECONOMYNEXT – Sri Lanka’s Securities and Exchange Commission had ordered the payment on a sale of share Blue Diamonds Jewellery Worldwide Plc by its chairman Xia Liqiang, over suspected securities fraud.
The SEC ordered Capital Trust Securities, a Colombo based stock broker that sold the shares not to pay the Xia Liqiang for 15 million shares sold on May 09, and halt the payment if a cheque had already been issued.
SEC said it had reason to believe that the trade violated Sri Lanka’s securities law and "one or more offences" may have been committed.
In February 2016, the SEC ordered a forensic audit of Blue Diamond Jewellery books (link).
SEC said at the time that shareholders and investors have alleged that September quarter accounts are misleading investors and money raised from a recent rights issue had been mis-used for the benefit of related parties.