PAL Equatorial Palm Oil Plc

By Joe Hoppe

Capital Metals PLC shares fell Monday after it said that its Sri Lankan subsidiary Damsila Exports Pvt Ltd. is being investigated over its ownership structure by the Sri Lankan government, and its two industrial mining licenses have been suspended.

Shares at 0812 GMT were down 2.0 pence, or 42%, at 2.75 pence.

The miner said that it received a notice from the Geological Survey and Mines Bureau, saying it considers it necessary for the current shareholding structure of Damsila to have been approved by the Board of Investment of Sri Lanka. As it doesn't have such approval, investigations will be carried out.

Capital said it has been working with the bureau to clarify concerns over Damsila, which it said was set up in 2016 and has been clear with the bureau throughout its dealings. Capital said the uncertainty appears to stem from the application of the Foreign Exchange Act of Sri Lanka, which governs investment in shares in companies incorporated in Sri Lanka by non-residents, but its legal counsel is of the opinion that it conforms to the regulations.

"The company will continue discussions in a cooperative manner with the relevant Sri Lankan government authorities to resolve this issue as soon as possible," Capital said.

Write to Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

December 12, 2022 03:44 ET (08:44 GMT)

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