Financial Times

DFCC ups stakes in conglomerates
DFCC Bank, in which tycoon Harry Jayawardena has considerable influence, has increased its investments in some of the top conglomerates listed on the Colombo Stock Exchange.

These shares account for over 32 percent of the cost of the bank's quoted ordinary share portfolio compared with 7.7 percent the year before. The bank has raised its stake in John Keells Holdings to 638,954 shares from less than 100,000 the year before. Its annual report for the financial year ended 31 March 2005 gives the cost of the JKH stake as Rs 67 million and the market value at Rs 86.6 million.

DFCC Bank has also increased its stake in Hayleys Ltd to 198,360 shares from 91,574 sh ares the year before. The stake was acquired at a cost of Rs 10.2 million while its market value is Rs 22.3 million. The bank also bought into Aitken Spence last year and now owns 119,400 shares acquired at a cost of Rs 40.9 million. The stake's market value has been given as Rs 45.4 million.

DFCC Bank also holds stakes in these conglomerates through its subsidiaries. Jayawardena, a close advisor of President Chandrika Kumaratunga, appears to be the largest shareholder in DFCC through various companies. Commercial Bank, believed to be controlled indirectly by him, has a 13.53 percent stake in DFCC, while Hatton National Bank (HNB), again another firm where he has much influence, has a total stake of 12.69 percent. Two companies directly owned by Jayawardena, Sri Lanka Insurance and Distilleries Corporation of Sri Lanka, control 11.608 percent and 6.51 percent of DFCC, respectively. Meanwhile Mahendra Amarasuriya, Chairman of Commercial Bank, has resigned from the DFCC board.

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