Yaddehige seeking to exit from RPC

Dr. Sena Yaddehige, the UK-based Sri Lankan entrepreneur who burst into the Colombo business scene some years back and ended up striking a deal that led to a take over of Richard Pieris and Co (RPC), may have taken on more than he can chew.

The media-shy businessman who rarely gives interviews to the media, wants to exit from all or most of the RPC group which he acquired in a hostile effort some years back and where he relies on a combination of close friends from days gone by and professionals to run the group. Yaddehige was not available for comment on a story that is taking shape in the Colombo stockmarket. “There is nothing in the air about whether he wants to sell RPC or not,” a senior company official said.

Regarding his other companies outside the RPC group, officials said Asia Capital is up for sale but could not confirm the status of Asian Alliance, the insurance company. But market analysts are certain he will exit from these two companies, too. The Sunday Times FT reliably learns that a combination of management and human resources issues has led to the decision to offload some or all of his companies which in recent times includes newspaper publishing.

Having to spend a lot of time overseas has also complicated the problems. He is looking for the ‘right price,’ according to an informed source, adding however that Yaddehige plans to keep plantations in the company which is the largest contributor to the group’s profits.

“Dr. Yaddehige is not interested in the other business, but he is keen on retaining the plantations, because he is keen on becoming a Dilmah in the future,” a company source told The Sunday times FT.

However, plantation industry analysts are skeptical about such a move, because they say it is a risky business to be in. “Plantations is an ‘out of your control’ business. It is true that the Richard Peiris’ Group made their money on plantations, but it is the kind of industry that will give you a good year followed by three bad years,” a stock market analyst said, adding that it will take a long time for the company’s tea brand ‘St. Claire’s to take off. The Sri Lankan entrepreneur founded UK-based Precision Varionics International (PVI), a leading European manufacturer of automotive sensors leading it to become a symbol of technological progress and quality recognised throughout the world. The company specialises in providing complete sensor systems incorporating pedal, sensor, harness and throttle valve angle sensors. Yaddehige made waves when he began buying into high value stocks on the Colombo bourse including a stake in the former Asian Hotels which once grabbed his interest for a majority stake before John Keells Holdings (JKH) entered the picture. It is reliably understood that a powerful stock broker did a kind of contra deal where Yaddehige bought a Richard Pieris stake held by JKH which in turn bought the Asian Hotels stake to finally end up with a majority share.

At the same time controversial GoldQuest Managing Director Vijay Eswaran was also into Asian Hotel shares and eyeing the company. Yaddehige owns the entire 22nd floor at the Crescat Apartments.

He initially joined as the joint deputy chairman of Richard Pieris and Co and later became the chairman, saying he wanted to modernise and expand the company and add further value to the group's manufacturing and export activities. After that some of the key personnel at Richard Peiris moved out as Yaddehige brought in new managers including his son to run the many companies in the group. RPC’s plantation segment includes managing over 50,000 acres of tea, rubber and coconut estates. The retail segment involves fast moving consumer goods (FMCG) and household products in Sri Lanka, operating through chains of hypermarkets and an island-wide showroom network. The rubber segment produces and distributes rubber and the tyre segment is into tyre rebuilding. The plastic segment manufactures polyurethane foam, rotational moulded and expanded polystyrene products. The services segment provides transportation, insurance and real estate management services.

A stock market analyst pointed out that Richard Pieris over the last two years has not being doing well. “In addition from January 2005 until now there have been three fires in three plants at the company’s various factories,” he said.

RPC has a 70-year old history in three main segments consisting financial services, transportation and plantations.