Financial Times

American & Efird (A&E) Lanka, the total thread solutions provider, has been appointed as the authorised regional distributor for the Lurex Thread Company, UK.

Lurex is acclaimed as the global leader for metallic and crystallised embroidery threads. The range includes specialised metallic bleach wash resistant threads, available for the first time in the local market. Its range of colours and product types provide a wide variety of options for buyers and manufactures to choose from.

Lurex threads are manufactured to the highest international specifications and constantly keep abreast of the ever-changing global fashion trends. The combined strengths of A&E Lanka’s industry expertise and the Lurex product range will contribute to filling the void in the production of value-added products by local apparel exporters, the company said in a statement.

“This new tie up validates A&E’s commitment to being in-line with current market trends for value-added embellishments, whilst providing an opportunity for apparel exporters to add value to their products,” said Inthikab Muhajireen - Regional Director, A&E Lanka.

He said the “A&E Lanka will function as the sole distributor for the greater Asian region, including Bangladesh, Pakistan and India, and thereby Lurex will be available across the region”.

A&E Lanka is a member of Brandix Lanka, the local apparel conglomerate. It is also the 2006 recipient of the American Apparel & Footwear Manufactures Association (AAFA) Excellence in Social Responsibility (ERS) Award in the Preservation of the Environment category, a first by any organisation in the South Asian region.

The Ceylon Chamber of Commerce (CCC) Trade Fair Unit in its effort to expand its trade relations has taken another bold step to lead the first ever Sri Lankan mission to Myanmar.

A chamber statement said the mission will be held from June 12 – 18, 2006 and will also include Thailand, in a bid to assist members with wider trading opportunities.

D.M.M.Ranaraja, Sri Lankan ambassador to Myanmar, said in a recent communication to the CCC that ‘ Myanmar is a potential market and the time is now opportune for Sri Lanka to explore this untapped market.’ He said countries like China, Thailand, South Korea and Vietnam are making maximum use of the available opportunities in Myanmar

The CCC said it has also just concluded a MOU with the Union of Myanmar Federation of Chambers of Commerce and Industry as an initial step towards strengthening its ties and embarked on organising this mission.

The Sri Lankan embassies in Myanmar and Thailand have identified Tea, Rubber products, Coconut products, Coir fibre products, Spices, Garments, Fertiliser, Tourism, Gems & Jewellery, Agro products and Shipping & Freight Forwarding as potential sectors to be promoted by Sri Lanka.

The Chamber plans to send a 10-member delegation and the highlight of the mission would be the One-on-One Business meetings, which will offer opportunities for mission members to have a direct dialogue with their business associates from Myanmar and Thailand. The delegation will meet with their counterparts from Yangon, Mandalay and Thailand.

The Sri Lanka Insurance Corporation is sponsoring a group of journalists and devotees to Chennai, India where the Sri Lanka Mahabodhi Society will once again organize Vesak celebrations. The sponsorship was recently handed over to the head of the Mahabodhi Society the Most Ven. Banagala Upathissa Thero by Isuru Tillakawardene, Chief Operating Officer-Personal Lines of Sri Lanka Insurance Corporation.

Mr Tillakawardene said the Mahabodhi Vesak celebration is an important event which helps spread the message of Buddhism and Sri Lankan culture to South India and SLIC is proud to contribute towards its success. The celebrations to be held at the Mahabodhi Society's Chennai Centre are carried out with the support of the Sri Lanka Deputy High Commission in South India and the Indra Vijaya Foundation. The highlight of the Chennai Vesak Celebration is a vibrant perahera that parades the streets of Chennai in bursts of colour and Buddhist pageantry.

The traditional dancers and drummers of the Sri Lanka Army and Navy oriental bands participate in the perahera, in a show of Sri Lanka's cultural splendour. The Mahabodhi Vesak Celebration in Chenna has been held each consecutive year since 2000.

Reference to your article published in your newspaper on April 23 under the heading "Commercial Bank AGM was badly handled", your attention is drawn to some misleading facts, which needs correction.

It was stated in the article that the poor handling of the meeting by the chairman was partly responsible for the delay of the meeting and in this connection the writer has accused the chairman for the following action taken at the meeting:-

1. Arranging for reading the contents of the entire Directors' Report:

In terms of Section 39 (3) of the Banking Act No. 30 of 1988 amended), the Report of the Board of Directors of any licensed commercial bank incorporated or established within Sri Lanka by or under any written law, shall be read at the Annual General Meeting of its shareholders.

The legal position is that the chairman is neither empowered to refer the matter to the House to decide on the necessity of reading the Directors' Report nor has the House the authority, even with unanimous consent, to take any decision on this matter. I believe that I have presented facts adequately to clear the misunderstandings, if any, created in the minds of the general public after going through the above article.

2. Permitting one shareholder to make long statements:

The writer may not be aware that a chairman of a meeting has a legal and moral duty to permit any shareholder who speaks on matters included in the agenda to express his or her views, whilst giving due attention to the total time allocated for the meeting. Since the writer has not named the particular shareholder, I am not in a position to state, under which specific grounds the shareholder referred to in the Article was permitted to address the meeting. Not only one, there were several shareholders who expressed their views on certain action taken by the Monetary Board and some Directors. All such shareholders were permitted to address the meeting, whilst cautioning them to restrict their speeches to any matter included in the Directors' Report, such as Review of Business, Corporate Governance, Risk Management, Compliance with Laws & Regulations and / or Financial Statements and / or Re-election of Directors, resignation of Mr. J. S. Mather, Filling of vacancy created with such resignation and / or Appointment of auditors etc. They were also reminded, whether necessary, to make such speeches as short as possible.

3. Permitting shareholders to speak on matters relating to the legal dispute:

Some reference has been made in the article to certain points raised by the shareholders in relation to certain matters that are the subject of a legal dispute in the Courts. I agree that it was my responsibility to prevent the shareholders from expressing their views, if it was the intention of such shareholders to criticise the proceedings / interim decision of the Courts to issue a Stay Order. As long as the speeches are made within this limit, and relating to the agenda it is the chairman's duty to permit such speeches.

4. Not declaring the proxy position prior to the conduct of the poll:

The writer seems to be thinking that the number of shares supported/opposed a resolution, by proxies can be revealed, prior to demanding a poll by the shareholders at the meeting. The legal position is not so. Such details based on the proxies can only be considered, in the event of a legally demanded poll. Therefore the writer's argument that the result of the show of hands should not have been declared without giving the proxy vote count is baseless. His second argument that if the winner was clear those who asked for the poll could have been requested to consider withdrawing their call for the poll, cannot be accepted legally.

5. Pointing out the circumstances under which EGM was summoned:

The minority shareholder, who wrote the article appears to be thinking that when the nominee directors of a large shareholder just agrees to holding an EGM at the Board Meeting, the Board of Commercial Bank should make arrangments to convene the EGM and then, when such shareholder feels later, that it should not allow the Bank to hold the EGM, the Board of Commercial Bank should listen to them and terminate the EGM. The writer is unaware that in such a situation, it is the prime responsibility of the Chairman to explain that the EGM was convened, in terms of a decision taken at a Board Meeting, at which all the Directors had the liberty to express their views. Certain views expressed by certain shareholders at the AGM would have been understood/ interpreted by some shareholders that the Commercial Bank summoned the EGM without proper authority of the Board. Due to this reason either the chairman or any other Director should make an attempt to explain the related matters, with a view of providing a clear understanding on the issue. It was obvious that there was a need to explain the correct position and also to permit the shareholders to express their views on the related issues. This is what happened at the meeting and it cannot be considered as encouraging an employee shareholder to castigate the shareholder, concerned as stated by the writer. Using certain recorded information to explain the relevant matters correctly and adequately is certainly not reading out the minutes of Board Meetings or divulging Board Room discussions.

6. Recording a statement relating to the non participation in the EGM:

What actually happened was that the shareholder concerned requested to record the statement referred to in the article, based on two reasons:-

I agree with the writer that the shareholder who requested to record the statement did not have any authority to make such a request based on the second reason aforesaid. However he had all the rights to express his views relating to the first reason aforesaid, which could be categorized under "Compliance with Laws & Regulations" , a matter specifically included in the Directors' Report in the Annual Report. The shareholder concerned was permitted to record the statement strictly on this basis. I do not know whether the writer was participating throughout the meeting, since he appears to have not known/not mentioned that the shareholder concerned made his request not only regarding the large shareholder's decision not to participate at the EGM, but also in relation to such shareholder's action against "Compliance with Laws & Regulations"

7. Other issues relating to the EGM:

You have blamed me for not projecting the collective position of the Board at the AGM. It is the understanding of the majority of the shareholders who were present at the meeting that I made every possible effort to project the collective position of the Board, whilst providing a reasonable understanding to the shareholders, on the issues raised at the meeting.

The writer seems to be satisfied when a shareholder is taking a completely different decision on a particular issue at a general meeting, when compared with the decision taken by such shareholder's nominee director at a previous Board Meeting on the same issue. Is the writer trying to emphasize that it is proper for the chairman to be silent on such an occasion, so that shareholders are continuously misled on related issues.

I cannot understand the basis on which reference had been made to the fact that "it became clear that the chairman was not well disposed towards some directors, even the Managing Director". Is it because I invited the Managing Director to respond to a few queries made by the shareholders at the meeting, on matters which were more appropriate to be answered by the CEO of the Bank?

M. J. C. Amarasuriya
Chairman, Commercial Bank

With reference to a report in The Sunday Times FT on February 12 under the heading “Sri Lanka risks losing export tariff concessions union - New BOI team accused of violating labour rights, the information relating to Workwear Lanka as stated in your newspaper is far from the truth.

The company in a statement said it has a union, the Workwear Trade Union, duly registered under the trade union ordinance of country. This trade union has the support of the majority of the employees and has been negotiating with the management on labour welfare and other issues. For the record, the company recognizes the value of a legitimate union as an arena for the representation of worker preferences an issues, which allows management a chance to resolve such issues before worker discontent escalates.

The FTZ & GSEU is an “outside” union that decided to dislodge the well functioning Workwear Trade Union in order to enhance its own national and political status. Using bully tactics it managed to get 32% of worker support. However when three female employees, belonging to the Workwear Trade Union, were harassed at their place of residence by a male employee and his gang of thugs with the view of intimidating them into giving the “outside” union their support, they lodged a complaint with the police and also complained to the HR department of the company. Concern for the safety and security of the workers prompted the company to suspend the errant male employee and an impartial inquiry was initiated as per the disciplinary procedure followed in the private sector relating to the suspension or termination of employment.

Consequent to the suspension, about 250 workers (32% of the total company’s workforce) went on strike without any prior notice and demanded the reinstatement of the worker who had been suspended. However 480 employees of the company (68%) continued to work normally and had no complaints whatsoever .The management of Workwear Lanka (Pvt) Ltd., as well as the BOI’s labour department tried to explain to these 250 workers, to let the inquiry of the suspended worker continue and in the meantime come back to work. After the continuous refusals to return to work, the management was forced to sack the strikers. As per regulations the Labour Commissioner was given a list of workers who had supposedly signed up with the FTZ & GSEU. A closer examination revealed that this union had attempted to inflate the numbers by duplicating some names and including names of employees who no longer worked for the company.

The FTZ & GSEU has been resorting to fraudulent tactics: it has shown more concern for upstaging another union than for the well being of their workers. They then had the audacity to enlist the help of well meaning NGOs who accept FTZ & GSEU as the aggrieved union when in fact this union could be well accused of disrupting a well functioning union that negotiated with management to enhance worker welfare. Recently, the Workwear Trade union successfully negotiated with the management the following benefits/ welfare for the workers that are already implemented:

* A Welfare fund of Rs: 25,000 per month to be used by workers and their families in case of any medical or other family urgency
* The construction of a Sports Complex
* Transport facility for all workers and supporting staff
* Monthly scholarship for the outstanding children of our workers
With the loss of approximately 250 workers, Workwear Lanka (Pvt) Ltd. was not able to fulfill contracts of its foreign customers and while awaiting a decision from the Labour Commissioner, was forced to hire temporary workers to complete its contractual obligations.

However the previous management of the BOI refused to issue gate passes to Workwear’s new recruits claiming in a letter that the “BOI will consider your request on completion of the action contemplated by the Commissioner of Labour.”

After numerous failed attempts to reverse this decision of the BOI, the management of Workwear Lanka was forced to take this matter to the Court of Appeal where the company was permitted to hire workers.

Workwear said it has always worked according to Sri Lankan Labour laws and rules. During this ongoing dispute, the management of Workwear handled this case, as stipulated in the existing Labour laws and procedures. The statement that Workwear Lanka has acted in violation of ILO Convention is both untrue and absurd.

The management of Workwear has already written to the ILO inviting any independent Evaluation Commission representing the ILO, the office of the Labour Commissioner or the BOI to visit the factory to get a first hand assessment of the excellent labour practices adopted by the management.

With regard to the threats made by the FTZ&GSEU that it would request the ILO to impose sanctions on Sri Lanka through the EU to withdrawn the GSP we are advised that the ILO is a tripartite international body which has no jurisdiction to interfere in an industrial dispute that arises in one or two factories in a given country.

If a complaint is lodged with the governing body of the ILO it would first seek the views of the respective government concerned. If it is a major dispute they would send a special emissary with the concurrence of the government concerned to report on the situation and the emissary would consult all parties including the employer.

We are advised that neither the ILO nor the European Union is going to take into consideration the particular situation in one or two factories in the country on the question of granting GSP status arises but they would consider the overall country situation.
(Business Editor’s note: that article was based on a statement by the FTZ & GSEU union).