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Raj
Rajaratnam moots Indian-style devolution He called for stronger regulation of the market by the Securities and Exchange Commission (SEC), saying good corporate governance and effective regulation were two criteria considered important by foreign investors seeking investment opportunities in emerging markets like the Colombo bourse. Rajaratnam identified tourism, infrastructure and the consumer sectors as the growth sectors of the Sri Lankan stock market in the longer term. Rajaratnam, whose company controls US$ 5.5 billion in equity funds, said that peace with devolution will help the Sri Lankan stock market to grow. "I think there should be peace with significant devolution, which is something along the lines of the Indian model, where you have separate states under a unitary Sri Lanka. I think this is the right structure," he told The Sunday Times FT in an interview. When asked whether he has -- as speculated - funded the Eelam cause, he said, "I have funded orphanages in Mullaitivu, as much as I have funded education projects in Kalutara. I funded Vanni Tech as much as I funded Sunera Foundation. I know there is speculation, but I don't worry about it one bit. When somebody is successful, apparently it appears that no good deed goes unpunished. People don't understand philanthropy in this country. Here when you do charity people say that I have got political ambitions. I am very tenacious, so these statements are not bothering me," he said. When asked whether the blue chip, John Keels Holdings (JKH), where he holds a large stake, makes its decisions on his recommendations, he yet again attributed it to 'mere speculation' saying that he has taken a long-term bet on Sri Lanka and that he is a passive investor in JKH. He said he opted to invest in the conglomerate because it has invested in tourism and infrastructure, which are two natural growth industries. "It is the largest market capitalisation company in the country and it is one of the best run companies as well, with a strong management team. When I look at an investment in a company, I look at the management team. The new management team is young, energetic and ambitious," he said. Rajaratnam said that he invested in Hemas Holdings, as it is a play on the tourism sector, and in Lanka Indian Oil Corporation (LIOC), where he is the largest investor, since it is a play on the growth of the economy. "I invested in Commercial Bank, because it is a play on the financial sector," he said. He added that he always stays with the leaders and avoids companies where there are controversies. "Companies such as DFCC where there is take over speculation, I try to stay away from. I don't want to be involved in those stocks because I am more longer term oriented," he said. He said his investment in the Sri Lankan stock market is personal. "After the ceasefire, I found that the Sri Lankan stock market is extremely undervalued. All the foreigners had left and the local investors had lost money on the mass bull run." He said he saw an opportunity because the market was cheap. Speaking on Sri Lanka he said that the country's debt is greater than its GDP. "That is not a good balance sheet to have," he said, adding that the country's bureaucracy is bloated. "Strong bureaucracy is needed and politicians need to communicate to the masses," he said. He said that business process outsourcing (BPO) is also a lucrative option. "If Sri Lanka gets its act together, the call centre - BPO will be a tremendous opportunity," he said. He said that the Securities and Exchange Commission should be a strong governing body. "The SEC is not as strong as it should be. If there are rules, they should implement them," he said. "The foreign investors look at corporate governance in companies and the regulators' role in the market and Sri Lankan stock market needs to be strong on these aspects," he said. Rajaratnam, attributing his success to being in the right place at the right time, said that he never takes his success for granted. "Only the paranoid survive is my favourite phrase, because you cannot be complacent in this business," he said, adding that being complacent or arrogant spells trouble. ...
ups stake in JKH, sells out of Hayleys Captain has also increased his stake to 37.8 million shares or 11.38 percent of the conglomerate, making him the largest shareholder, according to the JKH annual report for the year ended March 31, 2005. Last year Captain held 30 million shares or 10 percent. Rajaratnam, the biggest JKH shareholder last year, is now the second biggest shareholder, owning 35 million shares or a 10.56 percent stake. Last year he held 30.3 million shares or 10.09 percent of the firm. Rajaratnam has sold most of his Hayleys shares and is no longer listed among the conglomerate's top 20 shareholders, according to the Hayleys annual report for the year ended March 31, 2005. He was the largest individual and third biggest overall shareholder in Hayleys with over three million shares or a 6.29 percent stake in 2004. The year before, in 2003, he owned 7.79 percent of Hayleys. The annual report shows that Sri Lanka Insurance Corporation - Life Fund, now under the control of tycoon Harry Jayawardena, last year became the third biggest shareholder of Hayleys acquiring just over four million shares or a 5.40 percent stake, followed by the Employees' Provident Fund with 2.8 million shares or 3.72 percent. The biggest shareholder in Hayleys is the D.S. Jayasundera Trust followed by the firm's Employees' Share Trust. Rajaratnam has drawn attention over the last three years with his forays in the Colombo bourse where he acquired stakes in several blue chips. He also set up several funds to invest in Sri Lankan firms. |
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