ISSN: 1391 - 0531
Sunday September 9, 2007
Vol. 42 - No 15

Business chambers condemn Ranil’s remark

By Bandula Sirimanna

Sri Lanka’s business community and bankers have come out strongly against the latest remark by Opposition Leader Ranil Wickremesinghe where he has threatened to cancel the licence of HSBC, in a furore over the US$ 500 million bond issue.“It is not only foolish but a dangerous statement and doesn’t go well with Sri Lanka’s standing in the international community. Locally people will dismiss it as a political statement but the perception internationally is what worries me,” said an experienced banker.

He said HSBC has also been placed in a precarious position with such irresponsible statements. “They can’t back out from the loan now (if all the objectives are clear and within accepted banking practice) as such a step could be for a political reason and not anything else. In such a case, any denial of the loan can be perceived as a violation of a fundamental right,” he added.

Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) chairman Nawaz Rajabdeen said the business community was concerned over the statement.“It is a highly irresponsible statement and unbecoming for the Opposition Leader to make such utterances aimed at gaining some political mileage. On the other hand no government can desist from repaying a loan taken in the interests of the country from an international bank,” he said.

Addressing the ‘Udara Lanka Farmers Front’ at the UNP headquarters Srikotha on Thursday, Mr Wickremesinghe said the international bond issue was against the accepted laws of the country and a future UNP government would take steps to cancel the licence of HSBC if it goes ahead with the loan. The UNP said the Government was resorting to huge borrowings under the guise of funding infrastructure projects when the real reason was the funds were required for current spending including war expenditure.

Mr. Rajabdeen said HSBC has contributed immensely to the development of the country and noted that “one should be more careful in making statements against such a prestigious bank.” He said the FCCISL vehemently condemns the Opposition Leader’s irresponsible statement which will create a bad precedence and will also influence future governments to dishonour loan agreements entered with international donor agencies and banks.

The National Chamber of Commerce of Sri Lanka also criticised Mr Wickremesinghe’s comments but the chamber spokesman also said no one should take such statements seriously because it was aimed at getting some political boost for himself and the party.

“Sri Lanka cannot survive without the support of the international community under the present globalization system and it needs foreign assistance to face global economic trends,” he said adding that no government can ask a foreign bank to pack up and go just because it granted a loan. He said the legitimacy of such a loan cannot be judged by an individual or a government. Only an international court can give a judgement on such matters, he said.

International Chamber of Commerce Chairman Tissa Jayaweera agreed that the international bond was a sovereign borrowing of the Government and therefore no one can dishonour it.“The statement of the Opposition Leader on this issue was highly unwarranted and it will create a bad impression about the country before the international community. The country’s economy and the business community will be badly affected as such statements will create a poor impression among international donor agencies and foreign banks,” he said adding that a leader of a high calibre like Ranil Wickremesinghe should not make statements which are detrimental to the country.

As concern in the banking sector rose, HSBC on Friday issued a brief statement saying, “HSBC maintains the highest standards in all our banking operations and adheres to all laws and regulations in every country in which we operate.”

It said the bank, which has a long and proud history in Sri Lanka stretching back more than 100 years, is one of the largest financial organisations in the world and has a major footprint in the international capital markets based on integrity, longevity, commitment and consistency.

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Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.