October 14, Colombo (LNW): The recent and dramatic surge in the share price of Diesel and Motor Engineering PLC (DIMO) on the Colombo Stock Exchange has sparked intense debate among market participants and financial observers.
While a significant government procurement process for buses appears to be driving this increase, growing concerns suggest the possibility of underlying financial misconduct.
DIMO’s share price, which stood at approximately Rs. 1,400 only a few weeks ago, has now surpassed Rs. 2,400 — an all-time high for the company.
At the heart of this market frenzy is a government tender for the supply of low-floor buses, scheduled to be opened on October 17. The market widely anticipates that DIMO is the frontrunner to secure this multi-billion-rupee contract. Many investors are betting that winning such a substantial project would greatly enhance the company’s future earnings and profitability.
However, the legitimacy of this sharp price escalation has come under scrutiny. Several industry competitors are reportedly preparing to formally challenge the tender process.
Serious Allegations Levelling
They allege that the tender’s technical specifications have been tailored to align exclusively with the models supplied by DIMO, effectively excluding other qualified bidders. According to these critics, this represents a serious breach of competitive fairness and raises the possibility of collusion or procedural bias.
In parallel with these accusations, there is increasing suspicion that the market may be experiencing manipulation by parties with advance, non-public knowledge of the tender’s likely outcome. The implication is that individuals within government circles, DIMO, or associated entities might be engaging in insider trading — acquiring shares ahead of the official tender announcement in order to benefit financially from confidential information.
Under Sri Lankan law, such behaviour constitutes a grave financial offence. Insider trading compromises the integrity of the market, undermines investor trust, and violates the principles of transparency and fairness.
The Securities and Exchange Commission of Sri Lanka (SEC), together with the Colombo Stock Exchange, is anticipated to launch a formal investigation into the unusual trading activity and share price volatility.
Meanwhile, two opposition political figures are reportedly gathering information to publicly address the matter, and have sought the input of several automotive industry specialists, confirmed knowledgeable sources.
