Sri Lanka Telecom now under National Audit scrutiny
View(s):Sri Lanka Telecom (SLT), in which the government has a majority stake, now comes under the purview of the National Audit Office (NAO) of the Auditor General’s Department, after a recent transformation in its shareholdings.
While the oversight of the NAO should be seen as a positive move, company sources said it however reduces the company’s flexibility in competing in the market and taking ‘quick’ decisions when compared to its giant competitor – Dialog.
“With the NAO virtually sitting in our office, it limits our ability to compete in the market against a competitor than can swiftly respond to changes and pricing while we are subject to the oversight of NAO on every decision we take,” one source said.
While government holdings in the company has often been under 50 per cent with Maxis of Malaysia and the public float being in the majority, the accounts were always audited by Ernst & Young, (EY) and now under the guidance of the NAO. Until December 2021 – the main shareholders were Treasury (49.50 per cent), Global Telecommunications Holdings NV (Maxis) (44.98 per cent) and balance in the public float.
That changed in end 2023 to Treasury (50.23 per cent), Global Telecommunications Holdings Nv – Maxis Malaysia (44.98 per cent) and the balance in the public float. Under NAO rules, the moment the government owns a 50 per cent or more stake in a company, it must come under the diktat of the NAO.
The pendulum swung from private control to state control when, under a recommendation by the State-Owned Enterprises (SOEs) Restructuring Committee during President Ranil Wickremesinghe’s tenure in around November-December 2023, SLT bought shares in the public float (about 0.73 per cent from National Savings Bank), raising the government stake to over 50 per cent, with the intention of offering a 50 per cent stake to any investor in its privatisation drive. The decision to divest SLT was then suspended due to protests. “Now we are subject to NAO audit because of that move,” the source said, adding that maybe the government should shed some of those shares and bring it to below 50 per cent enabling the company to equally compete in the market.
The company in calendar 2023 reported a post-tax loss of Rs.3,921 million from a post-tax profit of Rs.4,765 million in 2022. But there is a recovery as the company reported a post-tax profit of Rs.2,001 million for the first quarter ended March 31, 2025, up from Rs.156 million in Q1 2024.
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