|
||||
Merc
Bank seeks fresh capital Many of its
depositors complained that the bank had defaulted its payment of
interest for several months, but the bank denied the allegations
and said that it was on the recovery path, after obtaining an international
banking licence from the Central Bank. Managing Director
Nihal Jayawardena told the Sunday Times FT that the bank was looking
for new investors to pump in additional funds after its existing
resources were heavily invested on developing its IT infrastructure. Merc Bank was
established in 1995 and operations began in mid-2000, with an initial
investment of Rs. 250 million, with the financial backing of politician
Milinda Moragoda, in which he created a separate unit known as Al-Aqwa,
which in Arabic means 'strong'. Interestingly
Pramuka Savings and Development Bank has also deposited money in
Merc Bank on a negotiated special interest, which is expected to
be withdrawn once liquidation begins. However, Jayawardena said
that Merc Bank would be able to pay Pramuka's deposits in full and
indicated that there would be no impact on the stability of the
bank, once these funds were withdrawn. Former chairman,
the late N.U. Jayawardena's endeavour was to establish 400 branches
in Sri Lanka to promote the bank at the grassroots level. However,
this was ignored by his grandson Moragoda, who during his tenure
as Chairman, invested heavily on IT, with a view to providing its
customers with a more efficient service. Director (Finance
and Services) Prasanna Kannangara said he was confident that the
bank was recovering after obtaining its international banking licence,
and would be comfortable once new funds were injected into the bank. He said that
the Central Bank delay in obtaining its foreign banking licence
had resulted in a loss of revenue for the bank, and the heavy investment
on IT had put the bank's funds in a bind. He noted that the bank
was currently negotiating with several investors and had drawn up
several plans to help attract new investors according to Central
Bank stipulations. He added that
Merc Bank had more than Rs. 600 million worth of deposits and was
financially stable. According to
the annual report for the year 2001, the operational loss reported
was approximately Rs. 119 million, and a similar loss is expected
for the year 2002, making it a cumulative loss of nearly Rs. 240
million. Officials at the Central Bank's Bank Supervision Department said that it was constantly monitoring commercial banks, and assured that there was no reason to be alarmed. They said Merc Bank could absorb its losses with the passage of time. ICASL
sees role in Jaffna Nearly 30 schools
in Thenmarachchi, Vadamarachchi, Valikamam and Jaffna city, as well
as the Jaffna University and the Jaffna Technical College are to
be covered at a series of presentations over three days from January
21, the institute announced in a statement. The career guidance
programme, modeled on the lines of others carried out by the institute
in the north central and western provinces in 2002, is organised
in association with the Institute of Professional Accounting Studies,
which conducts lectures in Jaffna for ICASL courses. "The unfortunate
situation that prevailed in the north for many years limited the
opportunities for many high potential students in the peninsula,"
ICASL President Asite Talwatte said. "It is our hope that this
programme will encourage a significant number of youth in Jaffna
to choose accountancy as a profession and once again contribute
to the economic progress of the country." He said the ICASL
hopes to conduct its Foundation Examination in Jaffna in July 2003
if adequate numbers register from the peninsula. "Chartered accountants hold top management positions in both the public and private sectors, and also practice as chartered accountants and management consultants in Sri Lanka and overseas," Talwatte added. "The skills and expertise of chartered accountants of Sri Lanka are recognised all over the world, with 27 percent of ICASL membership serving with distinction overseas." Villa
Ocean hotel in major Rs.100m refurbishment The Wadduwa
hotel said it has quadrupled the capacity of its banquet hall from
150 to 600 guests, refurbished its 67-room superior wing, re-laid
the deck of its swimming pool complex, rebuilt its pool bar and
kitchen, expanded its main kitchens, enlarged and refurbished its
lobby, refurnished and redecorated its air-conditioned bar and built
an Internet café for resident guests."We are now fully
geared to cater to the needs of a wide spectrum of guests,from discerning
up-market tourists, to all-inclusive groups, foreign and local honeymooners
and local families, as well as to service the needs of the MICE
(Meetings, Incentives, Conventions and Exhibitions) sector,"
the hotel's Project Director Ms. I. Gunaratne said. She said the
investment in upgrading the 20-year old hotel's facilities and giving
it a new look, which followed its acquisition by the Ceyko Group
a year ago, would make Villa Ocean View one of the most attractive
properties on Sri Lanka's south western coast at a time when there
are encouraging signs that tourism is on the rebound. Twice the
recipient of the 'Gold Choice' award of top UK tour operator First
Choice Holidays Ltd., the Villa Ocean View hotel occupies 15 acres
of what was once a coconut estate just 35 kilometres from Colombo.
This proximity to the city is a distinct advantage because the hotel can offerguests the setting and ambience associated with locations further south atthe end of a 40-minute drive, said V. Gunaratne, Managing Director and Deputy Chairman of Ceylon Shipping Lines Ltd., the managing agents of Villa Ocean View. Mercantile
Leasing raises Rs. 200 million These debentures
have been structured to provide MLL with a hedge against exposure
to liquidity mismatches and interest rate fluctuations in the external
environment. MLL will look to utilise these funds to further augment
its long term fund base. “MLL's impeccable reputation amongst financiers and the confidence placed in its strong management team assisted us in our endeavour,” a People's Merchant Bank spokesman was quoted as saying in a statement. MLL is a subsidiary of the National Development Bank while PMBL is an investment merchant bank which was featured prominently in several key debt placements that took place recently.Key shareholders of PMBL include People's Bank, HNB, DFCC Bank and Acceptor Business Capital (Sri Lanka) Ltd. Pramuka
depositors cry foul over double standards Two other commercial
banks were also on the hunt for new investors, after reporting heavy
losses and a high rate of Non-Performing Loans. Pramuka Savings
and Development Bank (PSDB) Chairman Udaya Nanayakkara stated earlier
that he had been given less than 48 hours to find new investors
to infuse Rs. 600 million, if the bank was to be re-opened. The depositors
ask why no such initiative was taken by the Central Bank to infuse
fresh capital to the bank, when it became aware that the bank was
struggling. Pramuka Managing
Director H.N.A Mendis said that the Board had decided to take legal
action against the Central Bank within the next two weeks. Mendis said
that the discrimination by the Central Bank against Pramuka would
also be included in its litigation process. Former Pramuka
chairman Rohan Perera had found an investor in 2000 willing to bring
in a capital of Rs. 500 million on the condition that the bank was
afforded parate rights, but due to the Central Bank's cold response,
the investor had diverted his investment elsewhere, he said. Mendis said
Pan Asia had been allowed to stagger its high Non-Performing Loans
over a three-year period, in an attempt to reduce the impact on
the bank's profits, but such a request by Pramuka had been repeatedly
turned down by the Central Bank. Pramuka's Non-Performing
Loans had risen to 70 percent prior to its closure. Interestingly,
the PSDB has deposited large amounts of money in Merc Bank and Pan
Asia at a negotiated special interest rate, which is likely to be
withdrawn if and when Pramuka's liquidation process begins. According to
the figures provided by Pramuka Managing Director H.N.A. Mendis,
Pramuka had deposited nearly Rs. 150 million in Merc Bank and another
Rs. 135 million in Pan Asia. However, Merc Bank has strongly denied
that the withdrawal of such deposits would have an impact on the
bank's overall finances. Sampath Bank
has announced that it was acting with a consortium of investors
in evaluating making an equity investment in Union Bank, which would
only be done once the results of the evaluation and the receipt
of the necessary regulatory approvals were obtained. Sources said
that despite the Central Bank claiming that commercial banks were
strictly regulated and financially stable, both Union Bank and Merc
Bank had been afforded a fresh lease of life due to their strong
political connections. Central Bank
Deputy Governor P.M. Nagahawatte and Director of Bank Supervision
Mrs. P. Sirisena, were unavailable for comment despite repeated
attempts to contact them. Meanwhile,
management consultant Ajith Nivard Cabraal met Pramuka depositors
last week and agreed to help intervene in their grievances. Cabraal said
that he had requested the depositors to provide him with the relevant
financial details, through which he would decide the best course
of action in solving the burning issues of the depositors.Cabraal
said that he would not be looking into the welfare of Pramuka's
board of directors or its other stakeholders. He is expected to advice depositors on the best method in which they could recover their hard-earned savings. |
||||
Copyright © 2001 Wijeya Newspapers
Ltd. All rights reserved. |
