22nd July 2001
Front Page
Editorial/Opinion| Plus| Sports|
Mirror Magazine
The Sunday Times on the Web

HNB trains law undergraduates

Hatton National Bank (HNB) has launched a programme to offer theoretical and on-the-job training for law undergraduates. A batch of 21 law undergraduates from the University of Colombo is undergoing training at the HNB at present, an HNB press release said.

The first phase of this training will comprise an orientation programme covering the operational activities and the product line-up in the key banking areas of operations, credit, international and treasury at the bank's training centre. 

The second phase will be branch based, on the job training, for a month for each participant. The bank will be paying an allowance to the participants for incidental expenses incurred. This is the third consecutive year HNB has conducted this programme, the release added.

Ceybank Fund outperforms stockmarket index

Ceybank Unit Trust has said that its Ceybank Fund outperformed the All Share Index (ASI) of the Colombo Stock Exchange by a 7.4 percent margin. The Fund beat the market by a 10.2 percent margin in the financial year 1999/2000 too, the Trust said in a statement on its financial year ending March 2001.

Other highlights of the report are that there was an 8.5 percent growth in total income to Rs. 60.9 million against Rs. 56.1 million in the previous financial year, the payment of a dividend investment portfolio and having one the largest funds in the country with net assets worth over Rs. 600 million.

Japanese subsidiary to develop software in Sri Lanka

A fully-owned 50 million yen Japanese venture was launched last week to develop embedded software and control software for some world's leading office equipment manufacturers.

Metatechno Lanka will harness and train local software engineers to develop embedded system software for its principal Metatechno Inc. of Japan. Mr. Tetsuya Toyota, Chairman of the local company, said that it would take at least three years to fully train the new staff as the training is very comprehensive and will be carried out through a formal training course as well as OJT (On the Job Training). He said that the reason for setting up an overseas development centre was to ease the job crunch that they are currently facing in Japan and they chose Sri Lanka as it had an excellent reputation in software development.

Fifty engineers are to be initially recruited and trained for the local operation. After a period of three years Metatechno Lanka will target revenues of US$ 4.1 million through the export of software products to Japan.

Metatechno Inc. of Japan develops embedded software and control software for customers such as Canon, Matsushita/Panasonic, Fujitsu, IBM Japan, Toshiba and Sony. The software will be utilised in its customers' office equipment products such printers, fax machines, mobile phones, etc. Metatechno Inc. currently has 165 engineers working in four technical centres in Japan. Metatechno Lanka is its first overseas subsidiary.

Entrepreneur of the year 2000

The "Sri Lankan entrepreneur of the year 2000" annual awards programme, organised by the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), is gathering momentum with a large number vying for these awards.

The FCCISL said that the awards, to be presented in November this year, is designed to recognise, reward and motivate Sri Lankan entrepreneurs to optimise their skills to reach the highest echelons of achievement, with benefits accruing to the national economy.

The scope and scale of this programme has also been expanded this year, with participation open to all nine provinces, with winners at provincial level being evaluated for awards at national level. 

A total of 279 provincial awards and 33 national awards are on offer.

An independent panel of distinguished judges drawn for the Ministry of Industrial Development, Board of Investment, University of Sri Lanka, Sri Jayawardenapura, Postgraduate Institute of Management, Sarvodaya Economic Enterprises Development Services, Institute of Chartered Accountants of Sri Lanka, Chartered Institute of Management Accountants, Sri Lanka Institute of Marketing, Institute of Chartered Secretaries & Administrators, etc. would select the winners.

Training for Lankan officials in Korea

A 15-member delegation of senior Sri Lankan government officials left for the Republic of Korea last week to participate in a ten-day training programme focusing on economic development strategies.

The programme, under the aegis of the Korea International Cooperation Agency (KOICA), is conducted with the objective of enhancing the participants' knowledge and understanding of Korea's export-led strategies for economic development and strengthening economic relations between Korea and Sri Lanka.

WW Group sets up operations in SL

The WW Group, UK, set up its first-ever garment manufacturing factory with a US $ 3.5 million investment with local joint venture partner, Wisdom Holding Pvt. Ltd recently. The venture, named WW Synergy Clothing Pvt. Ltd utilises the combined strengths of two major players in the apparel trade.

WW Group's chairman, Chris Ferris, functions as chairman of the new venture, with Mahen Amalean, chairman of Wisdom Holdings, as deputy chairman. The fully air-conditioned state-of the-art factory was opened at the Seethawaka Industrial Estate recently and six production lines are already in operation, presently manufacturing ladies blouses.

Mr. Amalean explained that joining hands with the British group gives them many marketing advantages. "The WW Group is very strategically placed in the market. They have first-hand access to information and they are very strong in the design and development aspects, which will benefit us immensely. Our own strengths and skills are in manufacture, in which business we have been in for the past 20 years."

The British group has been sourcing from several countries throughout the world and had a long-standing business relationship with Sri Lanka in general and the Amaleans in particular. This culminated in the setting up of a large buying office here a few years ago.

"There's more to the retail sector in the UK than Marks & Spencer. There is enormous potential in Sri Lanka, It is a part of our strategy to build up our Sri Lankan operations. We will try to ensure that the business stays here," said Mr. Ferris. "In the UK, when marketing merchandise, it's a perception thing but it helps if the retailers view us as a manufacturer as well."

The WW Group designs and develops men's, women's, children's and babies-wear, including women's intimate apparel and high fashion-wear. It is also market leaders in printed and sculptured co-ordinated men's women's and children's fashion accessories and character merchandise in children's-wear, for which they are one of the largest suppliers in the UK, and develop exclusively for larger retailers.

This is the fourth garment manufacturing plant opened under the Wisdom Holdings banner, but it is the first time that the company has ventured into a partnership with a foreign collaborator. Wisdom has three factories under the Paradigm clothing umbrella, in Dehiwela, Kottawa and Niyagama, Galle.

The factory is targeted to produce 140,000 women's and children's garments monthly, reaching 1.7 million pieces at peak production once fully operational. Training has commenced on two more lines and end-December will see 14 production lines in operation.

Seminar simplifies marketing laws

By Sonali Siriwardena
The perplexing principles of law relating to Bills of Exchange, debt recovery procedures, sale of goods and hire purchase were some of the issues discussed at a seminar on 'Sales and Marketing Laws in Sri Lanka' held in Colombo recently.

Mr. Chanaka de Silva, Attorney-at-law, (Partner- Nithya Partners), speaking on the topic of Bills of Exchange, said no document would qualify as a Bill of Exchange until and unless it fulfils every requirement enumerated in the definition given in the Bills of Exchange Ordinance.

On the issue of liability he explained that no person would be liable on a bill unless he has signed it. Accordingly the person who draws the bill (drawer) always attracts liability.

Mr. de Silva also lent his expertise to explain the legal steps that could be taken to recover a debt. He said that under our law an action for the recovery of a debt may be instituted in one of two ways, the choice of which would depend on the factual position relating to the debt. The first and more expeditious option available is action by way of summary procedure, the other being a regular procedure action, which usually is followed by a trial.

However, in either action, the onus of proving the existence of the debt falls on the party who seeks to recover the debt by producing evidence of the transaction which gives rise to the debt. Also discussed were the issue of prosecution and the validity of criminal prosecution as a viable option in the area of debt recovery.

In explaining the scope of the Fair Trading Commission Act, Mr. P. Wijeyaratne, former judge of the Colombo Commercial High Court, referred to the legal stand in relation to a monopoly situation. He said a monopoly, although in general excluded, is in fact permitted when it is of national or economic importance citing the Ceylon Petroleum Corporation as an example. Mr. Wijeyaratne also dealt with the workings of the Consumer Protection Act of 1979 and its subsequent amendments.

The main objectives of this Act include regulating internal trade, protecting the consumer and establishing fair trade practices. In this respect there was focus on the guidelines laid down to ensure the achievement of the above-mentioned objectives and the avoidance of unhealthy trade practices.

Mr. Saleem Marsoof, P.C. Additional Solicitor General, dealt extensively with the topics of sale of goods and hire purchase. Here the particulars relating to the Sale of Goods Ordinance and the Consumer Credit Act were lucidly explained with the use of case law and precedents.

The organisers of the event Manage Right (Pvt) Ltd. specialises in coordinating seminars on issues related to trade and business. Formed in 1995, the company has organised around thirty such seminars on topics such as banking, marketing strategy and proposed statue laws.

The topics included the Fair Trading Commission Act of 1987, The Consumer Protection Act, The Sale of Goods Ordinance, Consumer Credit Act of 1982, Unfair Contract Act of 1997, Bills of Exchange Ordinance and debt recovery procedures.

Hayleys Electronics: Turnover growth despite difficulties 

Hayleys Electronics Ltd, a local market leader in consumer electronic appliances, recorded a 17 percent growth in turnover but witnessed a fall in profits in the year to March 2001.

The company said in a statement that profit margins suffered badly due to difficult operating conditions that prevailed during the year and unfair competition due to escalation of smuggling and other malpractices towards the latter part of the year.

The company represents prestigious international brands like Philips, Daewoo, Daytron and Usha. Managing Director, Sujiva Dewaraja said at the Hayleys Electronics' annual partners meeting that although consumer demand was generally lower during the year, the electronics business made a turnover of Rs 1 billion.

Some of the external factors for the decline in profits of the consumer electronics company were the surcharge on customs duty of 40 percent, increase in other taxes, volatility of the Rupee versus the US Dollar and the sharp increase in bank interest rates.

A highlight of the event was the presentation of more than 50 air tickets to destinations such as Germany, Singapore, Bangkok and Egypt, as well as trophies and certificates to top performers among dealers, sales representatives, showroom personnel, service agents and personnel of the bank branches that participated in the company's easy payment schemes.

SriLankan launches fourth weekly flight to Kuala Lumpur

SriLankan Airlines, now flying its new Airbus A330-200 thrice a week to Kuala Lumpur, is adding a fourth flight on this route from September 1, the airline said.

The new flight, which will operate on Saturday, will also be non-stop to KL.

The new Colombo/Kuala Lumpur flight is an attractive connection for passengers arriving from several western destinations such as Paris, Zurich, Frankfurt and Stockholm and South Asian destinations such as Male, Chennai, Delhi and Mumbai.

"The new weekend flight to Kuala Lumpur gives our customers a better choice of flights and also offers attractive connections," says SriLankan CEO Peter Hill.

New corporate card from COMBANK 

An internationally accepted corporate travel and entertainment card has been launched in Sri Lanka by the Commercial Bank of Ceylon in association with MasterCard.

The COMBANK international corporate card is intended for use by company executives who travel and entertain frequently on company business within Sri Lanka and overseas, Commercial Bank Card Centre's Senior Manager Amitha Munasinghe said in a statement.

The card, which has a unique design that distinguishes it from other corporate cards available in the market, is in green plastic with the name of the company embossed on it for easy reference and identification. The card can be obtained by all corporate clientele of the bank to any member of staff with individual limits for each card, he said.

The international corporate card was made possible through Commercial Bank's tie-up with MasterCard. The card also offers access to over 900,000 ATM machines worldwide through the 'Cirrus' network, and the facility to make purchases at more than 21 million international merchant establishments through the 'Maestro' Merchant Network, the world's first largest on-line, real-time, PIN-based point-of-sale (POS) payment system.

Stretchline Elastics expand its global horizons

Stretchline Pvt Ltd., a subsidiary of MAS Holdings will officially announce its new global alliances with the launch of its international logo on July 23, 2001 at the Hotel Lanka Oberoi.

Stretchline commenced in 1995 as the first backward integration project of the MAS Group to service the garment export market of Sri Lanka and to directly export elastics to neighbouring countries. It is a tripartite joint venture between MAST Inc. of USA, Charnwood Elastic Group of the UK and MAS Holdings. This Company has grown rapidly to become a highly reputed manufacturer of the finest quality nylon elastic for lingerie and foundation garments. During its brief history the Company has grown from manufacturing 200,000 metres a week in 1997 to 4.2 million metres a week in 2001. Todate, the Company has invested approximately US $12Mn in Sri Lanka, a press release said.

Targeting a global presence and aiming to cater to increasing customer demand, Stretchline has diversified its operations to several regions. Apart from UK and Sri Lanka, Stretchline Mexico, Stretchline Indonesia and Stretchline China will commence operations shortly. In addition with the merger of Charnwood Elastic Group and Tubbs Elastic Group of the UK and Stretchlon USA from July 1, 2001, the partners [associate companies in France by the name of Fontanille and another manufacturing base in the Czech Republic] unanimously decided that all the plants apart from the associate companies would change their name to "Stretchline" - making it a truly global Company. Stretchline UK and Stretchline USA have already commenced trading under this name from July 2001. With this merger Stretchline's weekly global production would be over 10 million metres per week.

On July 23, 2001, Stretchline will launch its new logo and brand image at a grand ceremony to be held at the Hotel Lanka Oberoi. Stretchline's global partners, customers, suppliers, government officials, bankers and members of the trade in Sri Lanka will grace this important event.

MAS Holdings takes pride in being a local company with a global focus, which is greatly committed to strengthening the textile and apparel industry of this country. With the international diversification of Stretchline, MAS believes that a landmark has been reached for the industry to shine in the global spotlight.

'Ways to be Successful in Trade'

Siddhalepa conducted a one day Seminar for its Dealers in the Sabaragamuwa Province on June 23, 2001 at Ratnaloka Tourist Resort at Kosgala, Ratnapura. 

The theme of the Seminar was "Ways to be Successful in Trade". 

It was well attended by all its dealers in the area. 

Chairman of Siddhalepa Deshabandu Ayur. Dr. Victor Hettigoda in his address stressed that the idea in organizing the Seminar was not to promote or sell Siddhalepa Products but to purely educate the Dealers on the correct Financial Management and other procedures they should adopt to properly manage their business and how to survive at hard times and still succeed and emerge as successful businessmen. 

He conveyed to them his own experience concerning the business and ways to win the hearts of the customer since the progress of the dealer depends entirely on the satisfaction of the customer. 

Dealers were educated on correct ways of Credit Management, Inventory Control, dealing with Creditors etc. 

AsiaSoft obtains ISO 9001

At a recent ceremony held in Colombo, AsiaSoft was awarded the ISO 9001 certification for software design and development services. The certificate was handed over to the Chairman, AsiaSoft, Mr. Ranjit Fernando by the Director-General, Sri Lanka Standards Institution, Mr. Ranjith Jayawardena.

"This is a major milestone we have achieved in the company's quality management work, and will help us with our exports to USA and Europe. ISO certification has now become an essential tool to be able to compete in the international markets," commented Mr. Ranjit Fernando.

AsiaSoft is one of Sri Lanka's leading management and consulting companies specializing in Software Development and Business Consulting. AsiaSoft has to their credit completed many offshore development projects mainly through their offices in USA and the Middle East. Quick Accountant. com, a web based accounting package, AACAP, a cost allocation product for the Arthur Andersen Federal Tax Services Department in Washington DC, Aurora Imaging for the Secretary of State, in Ohio, USA, PainNet, a web based healthcare package also for the US market, are among the most successfully completed projects. Recently, Med-e, a hospital management system was developed for Welcare Hospital, an international hospital which is a part of the Varkey Group, a multinational Company in Dubai.

"The ISO methodology took us approximately 7 months to complete and involve a redefinition and consolidation of existing company process. In addition to the ISO 9001 certification for software design and development services, we are further supported by e-QPRO, the proprietary standards and methodology set by our Quality Assurance Division This would enable us to execute high quality projects within the stipulated time," said AsiaSoft Managing Director Ms. Sujatha Nadesan.

Split-level apartments 

A Sri Lankan property development company has designed apartments with the unique split-level concept catering for the country's middle-class groups.

Sierra Property Development Ltd project manager, Chanura Gunatillake, said the company was investing Rs. 70 million on this project.

At present the company is constructing a split-level housing scheme at Kandawatta in Nugegoda with 24 units. This new concept in apartment blocks provides occupants the feeling of living in an environment so unlike living in a flat, he said. The cost of each unit is between Rs. 2.6 million to 3.8 million.

'' on TNL TV

"", TNL's interactive business talk show hosted by Kumar de Silva and telecast every Wednesday at 9.05 p.m. will this week feature Andreas Klemmer, Project Coordinator, who will talk about the 'Start and Improve Your Business' (SIYB) project of the International Labour Organisation (ILO), and Rizvi Hassendeen, Director/CEO of Phoenix Plastics and Aluminium on how the use of plastic crates can help farmers drastically reduce waste. Viewers may write to the programme on

Training for Ceylinco Life personnel

Three insurance training experts from the Philippines were in Sri Lanka recently to conduct a series of performance enhancement and agency building workshops for sales personnel of Ceylinco Life.

The trainers Nick and Mercy Baron of the Baron Life Agency Inc. and Patrick Khoo, a Senior Agency Manager of Prudential Assurance Company, conducted training sessions for 30 managers, business development managers and regional sales managers, a Ceylinco Insurance statement said. The sessions focused on agency building to provide expertise to the sales force on how to make a career out of insurance sales as well as on how to ensure a policy remains active without allowing it to lapse.

Mr. Thusara Ranasinghe, Director Ceylinco Life said that their aim was to promote life insurance salesmanship as a career, not only as a job. "We want to show the staff how successful one can be in this business while providing a much needed service to the community by educating the public on the benefits of life insurance."

Bu$ine$$ Mailbag

  • Misleading investors and directors' responsibilities 
  • Customer blows a fuse 
  • Chemical trade - problems 
  • Playing games with shareholders?

  • Contributions welcome!

    The Sunday Times Business Desk welcomes letters/comments from readers on issues, problems and concerns relating to the Sri Lankan private sector and the economy. Letters or comments restricted to 200 words are preferred. All contributions, inclusive of the name of the writer, address and if possible, telephone number, would be edited and used at the discretion of the Business Editor. 

    Please send contributions to the Business Editor, 
    The Sunday Times, No. 8, 
    Hunupitiya Cross Road,
    Colombo 2 
    or on e-mail:

    Misleading investors and directors' responsibilities 

    Reading the annual report of Vanik Inc, which was received by shareholders after a wait of two years, makes the investor very angry. The report is bleeding red ink. The auditor's reports are unguardedly critical of the company, serious doubts have been expressed as to whether the amounts shown could be recovered at all. My mind harks back to 1993 when the seemingly unstoppable Vanik and its CEO announced an ambitious share issue at a premium of nearly 600%.

    Unfortunately, I do not have the prospectus that was issued. I distinctly remember the various assurances they gave about building up a financial services conglomerate in a controlled manner. But what happened was quite different. Ambition overtook caution and within a year Vanik took over the 100-year-old Forbes Ltd through funds borrowed at high cost from various sources. That was the beginning of the end. Most of the directors who were with the company at the start have now left possibly worried of legal suits by the shareholders and the board is now down from eight to three. There are reports that a group of shareholders is contemplating criminal action against the directors for having wilfully misled so many innocent shareholders who parted with their hard-earned money. Despite many investors having learned a lesson, and a bitter lesson at that, it is shocking to note that directors of leading companies even today are trying to mislead shareholders on Initial Public Offerings (IPO's) and swaps by making high sounding statements backed by dubious reports of equally dubious financial consultants.

    One such half-baked proposal is now being made to shareholders of the Commercial Bank, where the directors are in the process of advising shareholders to exchange their shares for those of a new and untested holding company. One cannot understand on what grounds the directors of Commercial Bank, which has a proud history of paying dividends averaging 40% during its entire history of over 30 years, would recommend to the shareholders to exchange their shares for this unknown, untested and unlicensed institution. But one thing is sure. This time, I will ensure that I will keep the recommendations sent by the directors of Commercial Bank, so that I can institute legal action against them when the share price fails to live upto assured levels and the dividend from the so-called holding company starts faltering.

    Bertram S. Gunasekera

    Customer blows a fuse 

    We refer to the letter of Mr. B. Kumara under the above caption in the Sunday Times on July 8 and would like to clarify the issue as the writer has distorted the facts.

    Uni Walkers are the sole agents for Matsushita Electric Industrial Co. Ltd (MEIC) products and this fuse is a safety device and is under a component category marked to indicate special characteristics for safety. When replacing MEIC fuses, we recommend using the same type. We import genuine spare parts from MEIC and supplied this customer a 1.6 ampere safety fuse at Rs. 100 inclusive of 12.5% GST. A similar fuse of another popular brand by their agent is sold for Rs. 197, much higher than our price. It must be pointed out that genuine spare parts imported legally cannot be sold at such cheaper rates mentioned by the writer. He has taken a product from the open market which is unsuitable and unsafe.

    Our selling price for this fuse is Rs.100 Our sales assistant in writing the invoice erroneously indicated the price and GST component. We regret this error.

    We have not charged an exorbitant price for this article as stated. The safety fuse is a manufacturer-recommended protective device to safeguard the machine and the customer from any power supply hazards. If replaced with cheaper alternatives, the results could be harmful to the VCR and the user.

    Uni Walkers Ltd management

    Chemical trade - problems 

    The import and sale of laboratory chemicals and equipment is a thriving business but at present many established firms in the industry are faced with major problems that need to be addressed.

    The problems begin at the point of obtaining a licence. Given the red tape associated with importing lab chemicals and equipment, unless the firm in question has access to the "proper channels," it can be a near impossible task to obtain a licence. The current taxation on such goods which include taxes like import duty, duty surcharge, excise duty, defence levy and the unavoidable GST, on the other hand, propel the selling rate forcing the consumer to pay a high price.

    Another problem faced by this industry is the increase in unauthorised distribution and smuggled goods. The staff of many government organisations are known to sell to established firms goods previously sold to these institutions at a cheaper rate. It is also no secret that the industry is supplied by " bag carriers" who go abroad, fill suitcases with chemicals and equipment and then walk through customs without declaring their purchases. Such goods hurt legal importers. 

    Clearly the trade needs to set up some standards in the industry to avoid undercutting and low pricing.


    Playing games with shareholders?

    Minority shareholders of Commercial Bank are deeply concerned about the holding company that the bank and DFCC are trying to form. So far, all we have been told is that a holding company will be formed to own these two institutions.

    We, shareholders of Commercial Bank, do not see any need for this. We do not see any benefit accruing to the bank which has been performing very well and where shareholders have been receiving good dividends and bonuses. The real value of our shares is definitely much higher than present market prices.

    DFCC on the other hand, is not doing so well. Once the holding company is formed, its shares will certainly not reflect the value of Commercial Bank shares, but will be diluted to some extent due to the lower DFCC share values. Obviously, we stand to lose the value of our investment.

    Since the Commercial Bank does not stand to gain from this "alliance" and we don't stand to gain from it either, it is interesting to see who stands to benefit. Although shareholders are yet to be adequately enlightened on the move one could visualise the scenario.

    The new company will obviously be owned by Commercial Bank and DFCC. The new company will raise funds from the public. Using these funds, the company will buy shares in both banks. Thus the Commercial Bank would recover their investment in DFCC and DFCC would recover their investment in Commercial Bank, both using public funds raised by the holding company. The remaining shareholders, in all probability, would be given shares of the holding company.

    Having recovered their investments in each other, these two institutions will continue to be owners of the two institutions through money raised by the new company. Here again since Commercial Bank owns only 7% of DFCC (according to newspapers) and DFCC owns over 29% of Commercial Bank, it is DFCC, who really stands to gain more from this move.

    It would be interesting to see what the major shareholder, Sri Lanka Insurance Corporation who owns 30%, has to say. While DFCC who came into the picture only recently will be very happy to recover their investments and yet own the companies, would the Insurance Corporation, a long-standing major shareholder of Commercial Bank, merely stand back and cheer as the winners go by and be satisfied with exchanging their strong Commercial Bank shares for weaker shares of the company?

    This investment we believe is public money and it is hoped that the decision makers would act responsibly. Central Bank authorities should consider the plight of minority shareholders before approving moves of this nature. If majority shareholders are allowed to play games just because they can bulldoze their way and force minority shareholders to be at their mercy, then there won't be any "small investors" in equity in the future.

    On the other hand, the Commercial Bank should be advised to continue with their business undisturbed, which they are doing very well now, and DFCC should be advised to concentrate on development.

    We sincerely hope the Central Bank would advise these two institutions to work individually, each concentrating on their respective activities, rather than encourage them to merge.

    If this merger takes place, it is the small investors who would be affected and they would be discouraged to invest at a time when every effort is being made to encourage investment in a dying market.

    Claude Fernando,

    Index Page
    Front Page
    Mirrror Magazine

    Return to Business Contents


    Business Archives

    Front Page| News/Comment| Editorial/Opinion| Plus| Business| Sports| Mirror Magazine

    Please send your comments and suggestions on this web site to 

    The Sunday Times or to Information Laboratories (Pvt.) Ltd.

    Presented on the World Wide Web by Infomation Laboratories (Pvt.) Ltd.
    Hosted By LAcNet