Financial Times

Pramuka revival plan seeks management change

Pramuka Bank shareholders led by Janashakthi Insurance Company last week submitted a preliminary proposal to revive the failed bank to the Central Bank in which they seek to change Pramuka's senior management and restructure its balance sheet by converting a portion of its deposits to equity.

No funding would be required from the Central Bank to revive Pramuka Savings and Development Bank (PSDB), according to the proposal by Janashakthi which has the backing of other big shareholders and depositors.

Janashakthi is the largest shareholder of Pramuka, holding 13.5 percent in the name of the National Insurance Corporation (NIC), which it acquired last year, and Acland Holdings Ltd.

A spokesman for the group said the Central Bank had given verbal approval to their initial proposal but had not yet granted access to the financial information about Pramuka they require to submit a more detailed plan.

The Janashakthi proposal suggests a phased out withdrawal mechanism for deposits after a grace period of two years, adjusting deposit rates to be more in line with current market rates, introducing Central Bank supervisors to closely monitor the bank, and downsizing its operations and introducing a cost management system.

It also suggests Pramuka should obtain parate execution rights and recover bad loans once suitable laws are passed and introduce an audit committee and a policy of corporate governance, and that the bank be renamed and a campaign launched to rebuild its image.

Depositors won some relief last week when the Court of Appeal issued a stay order against the Central Bank restraining it from liquidating Pramuka Bank. This was in response to four petitions against the Central Bank's decision to cancel Pramuka's licence.

Lawyers for the Central Bank gave an undertaking to court that it would not move to liquidate Pramuka until February 24.

The Central Bank decided to liquidate Pramuka in December after its investigations into the bank's finances revealed serious irregularities and fraud.Former Pramuka Bank chairman Rohan Perera, who reportedly fled abroad, is now being hunted by Interpol on the request of the Criminal Investigations Department.

The Central Bank has said more than Rs. 2 billion is required to be pumped into Pramuka to revive the bank.

Miller Copleston agents for top ceramic firms

Miller Copleston (Pvt) Ltd, a local company, has secured the agency for two top British ceramics companies - Sneyd Oxides Ltd and Whitfield and Son Ltd - for their sales and marketing in Sri Lanka.

Devinda Amarasuriya, CEO of Miller Copleston (Pvt) Ltd in Sri Lanka, said that both companies have an impressive reputation in the UK.

Sneyd Oxides have established a range of top quality glazes, being introduced to Sri Lanka for the first time.

These include China Glazes, Twice Fire Earthenware Glazes, Once Fire Earthenware Glazes, Stoneware Glazes, Hotelware Glazes and Sanitary Glazes. Sneyd Oxides supplies colour to ceramics manufacturers throughout the world.The second company, Whitfield and Son, established in 1851 to service the needs of the pottery industry in Stoke on Trent in the UK, specialises in products like Alumina, Plaster of Paris, Clays and Allied minerals, Elastomers and Resins, Grinding Media, Mill Linings and speciality products.

New thrust to promote exports

The government last week unveiled a new effort to revive and enhance the competitiveness of the export sector, which accounts for 30 percent of the island's GDP, in the context of increasing global competition.

The Ministry of Enterprise Development, Industrial Policy and Investment Promotion and the Export Development Board (EDB) will work out a five-year strategic plan 2003-2008 that redefines the EDB's approach to export promotion.

This would be used to achieve the government's short-term annual export growth target of 13 percent with a focus mainly on selected priority products and customizing the services the EDB gives exporters.

The ministry also set up 20 product specific advisory committees consisting of private and public sector representatives with the aim of identifying export constraints and opportunities and drawing up plans to develop these product sectors.Minister of Enterprise Development, Industrial Policy, Investment Promotion and Constitutional Affairs Prof. G. L. Peiris told a forum of exporters the government wants to develop a symbiotic relationship between the private sector and the administrative machinery.

EDB Director General L.S.G. Tillekeratne said the new export development thrust concentrates on branding, value addition, and improvements to productivity.

The government intends to exploit the free trade and preferential trade deals worked out with trading partners such as India, Pakistan and the United States as well as make better use of its overseas offices for trade promotion to support exports.

Exports recovered in the second half of last year following a contraction of 17 percent in the first half and a decline of 16 percent in 2001.

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