wants to be No. 1 in three years
Sri Lanka Telecom (SLT), which concluded an IPO selling off a 12
percent stake in the company, says it hopes newly acquired Mobitel
will be the top mobile operator in three years, company chairman
Thilanga Sumathipala said.
Mobitel to operate as an independent company and be the number one
mobile operator in three years," he said, adding SLT will provide
all the financial backing required.
a former Cricket Board chairman and businessman who took over SLT
and has now successfully steered an IPO that has been stalled for
more than two years and also ended a costly management contract
with NTT Japan without much fuss, said SLT Tele shops would continue
to sell mobile phones of all operators including Mobitel.
The SLT chief,
pleased with the success of the IPO raising Rs 3.25 billion, noted
that this was one of the best examples of a successful privatization
and a listing process. "The offer document was one of the best
seen in the share market. It cited all the risks, disclosed everything
and held back nothing."
statement from issue manager DFCC Bank said retail investors would
be given preference in the allocation of shares under the IPO, which
the government has decided to limit to a 12 percent stake despite
it being oversubscribed.
be given to domestic retail investors, domestic non-state institutional
investors and foreign investors in the allocation of shares. Applications
from state controlled investment funds and institutions would be
accommodated only after satisfying the demand from private and foreign
sources, the statement said.
of allotment for the SLT shares emphasizes the government's desire
to make progress in the development of the capital market by creating
a broad-based share owning democracy and encouraging foreign portfolio
investment," it said.
The response, especially from retail applicants, was "unprecedented"
with over 23,000 applications being received, the statement said.
said the government probably did not get enough subscriptions to
exercise its option to raise the stake on sale in the IPO to 15
percent. "From SLT's perspective, the IPO has enabled a true
privatization of the company with a likely increase in its shareholder
base to over 30,000, including existing shareholders," the
To afford maximum
participation by the private sector, the government has decided
to scale down allocations on the larger applications made by the
state controlled investment funds and institutions.
the resulting subscription profile after allocation is expected
to be as follows: domestic retail - 34 percent, domestic non-state
institutions - 23 percent, state institutions - 27 percent and foreign
- 16 percent. Sumathipala said the NTT management agreement which
cost SLT, US $ 5.5 million a year was also amicably terminated with
the company retaining the NTT-nominated CEO and the CFO
to keep the CEO and CFO as per the shareholder agreement, working
on monthly salaries paid by SLT. The company is saving 45 to 50
million rupees a month after the management agreement ended,"
Udaya Nanayakkara heads Pramuka
Travel trade veteran Udaya Nanayakkara was last week appointed
the new chairman of Pramuka Savings and Development Bank Ltd. after
Rohan Perera resigned.
The bank's operations were suspended by the Central Bank in October
because of alleged irregularities in its finances.
officials said they had no advanced knowledge of Nanayakkara's appointment.
Nanayakkara said he had informed the Central Bank after he was appointed
and said he was unaware of any requirement to tell the Central Bank
beforehand. Nanayakkara said he hopes to reopen the bank "within
the next two or three weeks" and that the depositors' money
quite liquid," he said. "It is just a matter of re-staring
the business." He denied there were irregularities in the bank's
accounts which are being probed by the Central Bank following allegations
that the bank was illiquid, found it difficult to pay its liabilities,
and had a large amount of non-performing loans.
Bank suspended Pramuka for a maximum period of 60 days, starting
WTO rep nearly loses his job
Sri Lanka's WTO representative in Geneva, K. Weerasinghe,
who was appointed Chairman of the WTO Customs Valuation implementation
committee, almost lost his position when he faced strong opposition
from other countries due to his failure to implement the agreement
in his own country.
retained his job after a last ditch effort by Sri Lankan authorities,
including members from the Customs and Ministry of Commerce, in
which a visiting WTO counsellor was assured the agreement would
be implemented on time.
The authorities had invited WTO counsellor, Xiobing Tang, who was
in the island in late October 2002, to inspect the measures taken
by the country in its efforts to implement the agreement as per
Tang had been
very impressed with the seminars and workshops that were organised
in preparation for the agreement to take effect, the Sunday Times
He had also been given a copy of the proposed Bill, which he claimed
as reassuring evidence that Sri Lanka was ready to implement the
agreement on November 1. However, the bill has not been passed thus
Importers grumble over new shoe tax
By Hiran Senewiratne
Shoe importers in Sri Lanka are complaining that a new tax
imposed in the 2003 budget to protect the local industry, is unfair
and could affect consumers rather than help them.
is going to be difficult and bleak for importers under this new
tax system" Wijitha Perera, vice president of the Shoe Importers
He said the tax of a flat rate of Rs 100 imposed on every pair of
imported shoes with effect from November was not practical as there
is a big demand for imported shoes from all sections of the public.
The tax was
to be effective from November 6 but was delayed till November 30
at the request of importers to help clear a backlog at the port.
Local industry officials concede that imported shoes, which account
for about 30 percent of the demand, are less expensive than locally
manufactured shoes because of cheaper production in countries like
China, India or Thailand.
M.S. H Ameen said the tax was unfair as a flat rate had been imposed
without any categorization such as kiddies', children, and ladies
and gents. "Whether the shoes cost Rs 200 or Rs 2,000, the
same rate of Rs 100 is applicable."
the Ceylon National Chamber of Industries Ranjith Hettiarachchi,
also a director at local manufacturer DSI, said the tax was a safety
net for small shoemakers, not for big manufacturers who are part
of a cottage industry, adding that there was a lot of dumping of
He said that
60 percent of the country's population didn't wear shoes because
of the cost and either wore rubber slippersor were barefoot.Mahesh
de Alwis, Financial Controller at the Bata shoe company, said the
imported shoes that flooded the market didn't conform to proper
standards. Under valuation of imports was a common problem allowing
importers to sell products cheap. He said what is more important
is to permit imported shoes only if they cannot be manufactured
in Sri Lanka.
Oil signs deal with BOI
Oil Corporation (IOC) last week signed an agreement with the Board
of Investment to supply petroleum, petroleum products and also to
provide retailing infrastructure facilities in the country.
covers petroleum, petroleum terminals, storage depots with fuelling
facilities, information kiosks and cyber cafes, the BOI announced.
It is one of the largest foreign investment projects in Sri Lanka
under the BOI regime with an investment amounting to $62 million.
Under the deal,
IOC will use the excess refining capacity in India to meet Sri Lanka's
petroleum product import requirements.
Sri Lanka imports about 1.2 million tonnes of petroleum products
CR survey reveals disappointing results
By Mihiri Wikramanayake
A recent survey on corporate responsibility (CR) among Sri
Lankan businesses has revealed discouraging results with many firms
having only a superficial idea of the issues involved.
The survey indicated
that only one third of the companies have a public environmental
policy and that resource allocation for environmental protection
and upgrading was not at a satisfactory level.
do not seem to have understood the concept of issues such as sustainable
development, gender issues, biodiversity, environmentalism, human
rights, equal opportunities, and HIV/health issues which go hand
in hand with CR.
In the case of community issues, the survey indicates no clear policies
among most companies regarding the rights and needs of host communities
while welfare activities are largely restricted to sponsorships
and donations to some charitable causes.
goes well beyond business's traditional involvement with charities;
it involves concerns as varied as human rights, family-friendly
workplaces, environmental protection and community development.
In Sri Lanka's corporate world, responsibility is a misnomer.
carried out by LGA Consultants and conducted by TERI-Europe and
the New Academy of Business, UK, discovered that the Sri Lankan
business community is generally 'conservative and bound by tradition.'
sector organizations from manufacturing, agriculture, service and
conglomerates were surveyed on CR. Many perceived corporate responsibility
as obligatory sponsorships of sporting events, donations to charities
and other social service activities.
is the politicization and historical factors of industrial and commercial
development in the country. According to the survey conducted by
Chandana Rathnasiri of the Department of Marketing Management of
the University of Sri Jayawardenapura, the corporate sector has
been subjected to 'political manoeuvering which has affected the
larger fabric of society.'
most has meant casting their lot with the political power base of
the time and the funding of politicians and their parties has become
the accepted norm.
Another unacceptable principle is that, in general, business philosophy
indicates that consequences do not matter in the quest for corporate
profitability; i.e. the recent Enron and WorldCom scandals in America.
In Sri Lanka,
many industries have to comply with foreign investor codes of responsibility
to bring about cleaner and socially conscious developments if they
are to vie for investment opportunities. Many players, for example,
in the garment industry are subjected to scrutiny by investors who
demand a correlation between good corporate citizenship and biodiversity,
hazardous material handling, toxic reduction, proper elimination
of resource waste and energy efficiency.
therefore, can investor and consumer pressure have on the government
and the companies? Better awareness of CR will have to be implemented
to benefit the country as a whole. Standards for CR must be established
with a development of a rating system based on specific industries
which will then enable the country to develop and expand ethical
Customers, financiers and investors must also take it upon themselves
to deal with businesses that practice CR as an integral part of