Tokyo Cement Company (Lanka) PLC last week announced the decision of its Board of Directors the sub division of each of its ordinary voting share into ten fully paid shares for which the support of members of the company will be sought.

This share split is intended to prevent existing confusion about dividends payable on the company’s voting and non-voting shares about which shareholders have expressed concern at previous general meetings.

Before the new Companies Act came into effect, the Tokyo voting share carried a par value of Rs.10 while the non-voting share carried a one rupee par value. With the enforcement of the new Companies Law, the concept of par value ceased.

Previously, the voting share commanded a dividend ten times as high as that commanded by the non-voting share creating confusion among many shareholders who found that other companies, with voting and non-voting shares, paid the same dividend per share in respect of both categories.

In a Stock Exchange filing, Tokyo Cement explained that if the company continued without correcting the anomaly created by the removal of the par value of shares, different dividend rates per share in respect of the voting and non-voting shares has to prevail "causing confusion in the minds of shareholders/investors.

The decision to sub divide shares was taken in this context, the company explained in its Stock Exchange filing.

Analysts said that there will be no liquidity of the Tokyo voting share following this change which was rumoured in the market keeping the share price of both categories of shares up in the face of the recent downturn in the stock market.

"This was most so where the illiquid voting shares were concerned and less so in the case of the non-voting shares," an analyst pointed out.