Financial Times

Three musketeers battle Harry J at Stassen
By Duruthu Edirimuni
Controversial business tycoon Harry Jayawardene, unafraid of challenges as he grows his empire, is now embroiled in a bitter feud with his old business associates at Stassen Group with the latter threatening to take him to court.
The trio -- V.P. Vittachi, Chairman Stassen Group and its two main directors, Rajpal Kumar Obeysekere and Zaki Alif who with Jayawardene left the old Consolexpo state company to set up Stassen, is accusing their ‘old pal’ of arbitrary and impulsive decision taking and contemplate taking him to court if he doesn’t agree to an out-of-court settlement.

The settlement offer worked out by lawyers is being kept a secret but it’s only a matter of time before the two groups’ part company, The Sunday Times FT learns. The trio and Jayawardene are not on talking terms.

Informed sources said the fallout has been brewing for a while. Vittachi and co. watched with dismay as Jayawardene took all or most of the decisions and the situation came to a head in the last three months – precipitated by the latter’s diminishing political influence after former President Chandrika Kumaratunga moved out of the political scene.

“When the government changed Jayawardene lost all his political clout and that is when the three directors decided to move in on him,” one source close to the directors, said. Asked why the three directors are not going to courts directly, the source said it was due to an ‘image problem’.

“The three directors do not want to come out to the public as yet, because they do not want to tarnish their image with courtroom brawls, but they have threatened to go to courts if the issue is not settled,” he said. Jayawardene owns half the company with the balance 50 percent shares held by the three directors.

It is learnt that the directors are in favour of splitting up Stassen or permitting Jayawardene to buy their shares in the company. “The modalities of the settlement have not been discussed as yet but it is a signal to Jayawardena that he has to take a decision and that the three directors do not want to work with him anymore,” he said.

A valuation of the company has been suggested before the next step which is like a “divorce,” the source added. The Stassen Group is one of Sri Lanka's premier corporate conglomerates, with diverse business interests in exports and imports, manufacturing, banking, hotels, plantations and insurance sectors.

Stassen chairman Vittachi declined to comment on the row.

“The three directors’ main grouse is that Jayawardene has not run Stassen’s properly and they were complaining about his ‘erratic’ acquisitions, especially during the last four to five years, together with his infamous behaviour towards staff and fellow directors,” the source said. The acquisitions include Distilleries Corporation, Sri Lanka Insurance, Aitken Spence and Lanka Bell.

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