Feb 18, Colombo: Sri Lanka's Central Bank, the administrator of the private sector retirement fund Employees' Provident Fund (EPF) has rejected the allegation that the EPF has bought shares of The Finance Company (TFC) at inflated prices.

Issuing a statement Sunday, the Employee's Provident Fund Department of Central Bank rejected the recent allegation made by an opposition parliamentarian to a local newspaper.

"Accusations made by the MP concerned are false, baseless and without any foundation," the EPF Department said in the statement.

Explaining the factual position, the EPF Department said the Fund bought 4,497,600 shares that were allotted to EPF on February 23, 2011 from the Initial Public Offer (IPO) of TFC at Rs. 40.00 per share for a total of Rs. 179.9 million.

Since the shares were purchased through the IPO, not from the market, there was no involvement of a broker or seller and the monies were directly subscribed to TFC to strengthen its capital base.

The Fund has bought additional 593,600 shares during the period September - November 2011 at prevailing market prices.

The EPF Department asserted that at no time EPF purchased TFC shares above the market prices.

The EPF now believes that the proposed restructuring process of TFC would strengthen the financial position and performance, and expects the investment to generate satisfactory returns both by way of capital gains and dividends over the medium to long term.