Directors offer to buy Harry J's shares at 10% premium

Harry J's empire valued at Rs. 24.7 bn.,

Three founder directors of the Stassen business empire has offered to buy Managing Director Harry Jayawardena's shares in their diversified business holdings spanning, shipping, healthcare, leisure, food, liquor, plantations and banking at a 10% premium over the valuation done by an independent audit firm.

Ernst & Young (E&Y) Singapore, whom the three directors,-R.K ( Raj) Obeysekere, Zaki Alif and V.P. (Totsy) Vittachi had employed to do this valuation, had placed a median value of Rs. 24.7 billion on these businesses.

In two petitions filed before Commercial High Court Judge Rohini Walgama last week, these directors (petitioners) claim that they collectively have a 49.99% equity holding in one of the major companies in this business grouping, namely Stassen Exports Ltd (Company or the first respondent in one of the two petitions), while Jayawardena (second respondent in both petitions) has a 50.01% stake

In another holding company belonging to the Group, namely Milford Exports (Ceylon) Ltd., the petitioners claim that they have a 40% stake cumulatively, while Jayawardena has a 60% stake.

They have in the petition also alleged questionable circumstances under which Jayawardena came to be the major shareholder.

They have pro-rated their offer on the basis of Jayawardena's shareholding in the Group. Conversely, the petitioners have agreed to sell their stock in the Grouping to Jayawardena at the proportionate value.

Jayawardena had allegedly come up with a counter valuation from KPMG, India which had valued those assets at Rs. 2.6 billion. The petitioners say that this valuation is absurdly low, as manifested by the fact that the offer the petitioners had made to the second respondent for his proportionate interests exceeded four times the total value given by KPMG on all the companies.

Citing reasons for the decision to go their separate ways, the petitioners alleged that Jayawardena had been acting in an arbitrary manner, in matters including strategic buys and acquisitions and also subjecting them to harassments and threats, alleged financial impropriety, attempts to remove Vittachi as Chairman of Stassen Exports and Milford Exports, two of the Groups major holding companies, and also as Chairman of Distilleries Corporation of Sri Lanka (DCSL), one of the Group's major cash cows, which is also the holding company of Sri Lanka Insurance Corporation (SLIC) and allegedly making arbitrary Board appointments.

Having heard the submissions made by Counsel for the petitioners, and also having perused the petition, affidavit and documents annexed to the petition, Walgama issued notice to the respondents returnable on August 29, 2008, to show cause why the relief prayed for by the petitioners against the respondents should not be granted.

The petition was supported by Romesh De Silva (PC) with lawyers Chanaka De Silva, Sugath Caldera, Aruna Samarajeeva, Shanaka Cooray and Eraj De Silva, instructed by lawyer G.G. Arulpragasam. (See page 24 for detailed report)

SL  must sign CEPA

Sri Lanka should take the opportunity to enter into a Comprehensive Economic Partnership Agreement (CEPA) with India, as other countries are clamouring to do so, a businessman said.

Indo-Lanka Chamber of Commerce & Industry (ILCCI) President Mano Selvanathan speaking at the ILCCI AGM on Friday said that Singapore has already entered into a CEPA with India, a market of 1.2 billion people, second only to China, which has a 1.3 billion population.

CEPA envisages to broaden the scope of the present Indo Lanka Free Trade Agreement (ILFTA) which is currently restricted to the trading of goods, to encompass Services as well.

Selvanathan further said that ASEAN, EU and Bangladesh were all clamouring to enter into a CEPA with India.

He  said that if some areas were contentious, there was always a "fallback review," where such matters can be taken over by the negative list. Under the ILFTA, both countries have negative lists in order to protect local industries, where such imports are subjected to normal duties and are not allowed to enter on a duty free or on a duty concession basis.

"If India was not there, we would in any case have had to import such items from elsewhere," Selvanathan contended. They say that the only items that benefited by the ILFTA were vanaspathi and steel, but there were also other items that were exported, he said.

Companies such as DAMRO has benefited from the ILFTA. Elephant House Ginger Beer is virtually found in every bar in India, while Samahan  is also selling well in the Indian market, said Selvanathan.

"You cannot always win," he said. "We have trade surpluses with the USA and EU, while on the other hand we have a trade deficit with India," said Selvanathan.

While the Americans say that their economy is inundated by cheap imports from China, on the other hand this has released a trillion dollars, enabling the American consumer to invest such surplus monies in the stock market, said Selvanathan.

L/Cs mandated for $ 10,000 imports

The fear of foreign currency ostensibly taken-out for imports, but with no such transactions actually taking place, has made the Central Bank to introduce regulations that makes such imports, if they are US$ 10,000 and above, to be made only after a letter of credit L/C) is opened, Central Bank Governor Ajith Nivard Cabraal said.

He was responding to a query made by Ceylon Glass Company (CGC) CEO Sanjay Tiwari as to why L/Cs need to be opened, when there are cheaper avenues, other than opening L/Cs, are available to make such imports.

Tiwari further said that such purchases are underwritten by a bank guarantee

The occasion was the AGM of the Indo-Lanka Chamber of Commerce & Industry (ILCCI) which took place on Friday, where Cabraal was the chief guest.

CGC was recently acquired by an Indian company.

ILCCI President Mano Selvanathan asked as to why investors cannot invest in Indian rupees (IRs.) in Treasury Bills (T Bills), with the government designating currencies such as US dollars, Great Britain Pounds and the Euro only for such investments.

The government recently partially opened the T Bills and T Bonds markets for foreign investments while also permitting foreigners to open rupee accounts.

All these investments free foreigners from paying the 10% withholding tax which locals however have to pay on the interest earned in their bank deposits if it passes a certain threshold.

Cabraal said that if the Reserve Bank of India gives the greenlight for such investments to be made in IRs., then the CB has no objections.

He further said that due to heavy remittances and surpluses, the IRs. Had been gaining ground against other currencies. That's why the RBI has permitted Indians to take foreign currency out for investment.

Cabraal said this in response to a query made by Selvanathan as to why the CB, like the RBI, cannot give local investors the greenlight to take foreign currency out for investments. Cabraal also said that the CB do allow local companies to make offshore investments.

Lubricants is like making tea

LAUGFS Holdings became the eighth player to enter the local lubricants market when they launched those products on Wednesday.

This Rs. 350 million venture follows hard on the heels of the company being one of two firms selected by the Environment Ministry to check the emission standards of vehicles in a Rs. 850 million project.

"Ours is a Rs. eight billion group of companies comprising a total of 15 enterprises and employing 2,500; its chairman W.K.H. Wegapitiya (45) told The Sunday Leader.

The Group's other businesses include operating a chain of supermarkets and business pertaining to the liquefied petroleum gas (LPG) industry, catering to the domestic, industrial and auto-gas services.

In addition the company has an operation in Perth, Australia to convert petrol vehicles to auto gas and also to supply "care care" products.

Its Managing Director Thilak de Silva said tha the auto-gas industry was a lucrative business due to escalating fuel prices with the company finding it difficult to meet the demand. "We have a long waiting list," he said.

Wegapitiya claimed that they have 35% of the domestic LPG market (their sole rivals being Shell), 60% of the industrial LPG market and 5% of the autogas market.

Recently LAUGFS reduced the price of a 12.5 kilogram domestic cylinder of LPG  by Rs. 69 to Rs. 1,668; whereas Shell increased their's by Rs. 8.

Wegapitiya said that it was possible to make this steep reduction because they were getting part of their LPG requirements from the Ceylon Petroleum Corporation without having to import the same and also because their overhead costs were much less relative to their competitor.

He also said that the local lubricant industry was a 45,000 kilo litre industry and that they have 25 fuel stations plus distributors and dealers islandwide to market their lubricant products.

He further said that 80% of the vehicles in the country were from the Western Province.

"Lubricants is a trading business like making a cup of tea, one needs base oil and fuel additives for this business," he said.

Wegapitiya also has plans to expand this business to the SAARC region and hopes to start a blending plant to manufacture (blend) lubricants locally in the future. Currently LAUGFS obtains this finished product from Singapore.

Annual housing demand: 100,000

Seylan Bank launched a novel housing loan scheme branded "Hadha Medura" recently.

The feature of "Hadha Medura" is that Seylan Bank promises its housing loan applicants disbursements of the loan within 10 days of completion of the required documentation. In addition, the first 100 approved applicants would be offered an attractive interest rate of 19% p.a.

The demand for houses and urban infrastructure is expanding rapidly with population growth and urbanization.

The population is growing at 1.1% annually, whereas the urban population is growing at a higher rate of 3%. Trends indicate that more than half the population of the country would live in urban areas by 2016, requiring rapid development of urban infrastructure. The annual new demand for houses in Sri Lanka is estimated to be around 100,000.

The hassle of having to submit various documents from time to time in order to complete documentation has been a regular irritant for those who apply to financial institutions for housing loans. However, the "Seylan Hadha Medura" Housing Loan promises to overcome such problems and to disburse the loan within 10 days once such documentation is complete.

"Speedy processing, coupled with an affordable rate of interest would give "Hadha Medura" an advantage over run-of-the-mill housing schemes available in the market. In order to make this a reality, and as envisaged by our Founder Chairman, Deshamanya Dr. Lalith Kotelawala, the bank would entertain applications and disburse such loans at a specialized unit at the Ceylinco Seylan Towers," said Seylan Bank Asst. General  Manager Mrs. Yasanthi Udurawana.

Gateway launches Graduate School 

Gateway, Sri Lanka’s leading educational organization plans to develop its  tertiary education sector by launching the Gateway Graduate School. Situated in close proximity to Gateway College, Rajagiriya, just 100 yards from the Parliament Road in a salubrious environment with a serene canal flowing on a side, the Campus consists of state-of-the-art facilities for modern teaching, sports and recreation.  

Gateway Graduate School, in partnership with NCC Education UK will initially offer a choice of two career pathways to complete degrees from Wales University here in Sri Lanka.

They are able to receive the degree at the university convocation in the UK. Undergraduates will also have the option of transferring to universities in UK, USA or Australia at the end of every academic year.

The three year programme of study is structured for students to receive industry recognized qualifications at the end of every year. The organization wishes to offer degrees in more specialties from more universities in time to come. 

BSc (Hons) in Business Computing and Information Systems equips graduates with the technical and personal skills necessary for taking part in the design, implementation and management of modern computer systems and to provide professionally-minded computer practitioners with the responsibilities and challenges that the computing industry demand.  

BSc (Hons) in Business Administration covers the scope of international business through a logical and cohesive progression over a period of three years. It includes modules preparing the students for work or postgraduate study in the areas of management, accounting, marketing and finance. On completion of the degree, students will have the knowledge and understanding required at various levels in an international business working environment as well as the skills required to research, analyse and manage business relationships, or to develop further through postgraduate study.  

An additional International Foundation Year (IFY) is available for students who wish to join after Sri Lankan or London OL.  IFY will be of benefit to students who wish to continue their studies to degree level and beyond, but who are currently under-qualified both linguistically and in their subject specialization to begin undergraduate studies. The programme in addition to raising students’ English level will also provide a firm grounding in Business and Computing along with study skills, personal development and culture. 

With qualified and experienced staff drawn from the industry, an up-to-date library and multimedia center, the Graduate school promises a new revolution in teaching and learning. A beautiful and a spacious garden with play areas for many sports including Tennis, Basketball, Netball and many others provide the necessary environment for a modern campus.

Facilities such as swimming pool, badminton and squash courts will be made available to students in the near future.  

The Governor of the Graduate School is Vidya Jyothi Emeritus Professor Dayantha Wijeyesekera. As a former Vice Chancellor of two Universities, Moratuwa University and Open University of Sri Lanka, Wijeyesekera brings in a wealth of experience as a renowned educationist and an institution builder. Through Gateway Graduate School, he wishes to provide tertiary Education opportunities at affordable costs either entirely or partly overseas depending on the parents’ choice.

 He is of the view that obtaining qualifications from foreign universities should be based on recognition from local industry and professional bodies. He mentions that every endeavour would be made to achieve these goals. 

Gateway Chairman R. I. T. Alles mentions that the organization is delighted to be opening the new Graduate School. When Gateway International School was renamed as Gateway College, the theme and focus was renewed to provide education from ‘Foundation to Graduation’. Today, he sees that dream come true.

SL station wins two awards from Emirates 

The passenger and cargo operations of Emirates in Sri Lanka have been recognised for outstanding performance in 2007/08 with two top accolades presented at Emirates’worldwide, annual commercial conference in Dubai. 

Emirates’ Sales Manager for Sri Lanka Devika Ellepola, accepted the Outstanding Achievements Award in the Passenger category from Emirates’ Commercial Operations Senior Vice President West Asia & Indian Ocean Salem Obaidalla, while the Best GSA Award from Emirates SkyCargo was presented to Emirates’ Cargo Manager, Sri Lanka & Maldives Damian Jayasuriya by Emirates Divisional Senior Vice President Cargo Ram Menen.

Emirates Area Manager for Sri Lanka & Maldives Chandana de Silva said: “These awards are particularly significant because they recognise performance during a period of challenges and difficult market conditions.

Our region is very competitive, and I congratulate the passenger and cargo divisions for exceeding targets through hard work and creativity.” 

Ellepola said: “Passenger sales revenue grew significantly and in fact exceeded the Colombo station’s target for 2007/08. The robust growth was achieved during a year in which services were temporarily disrupted due to airport closure, and bear testimony to the station’s potential and the resilience of the nation’s travel industry.”

Jayasuriya said Emirates SkyCargo today accounts for one eighth of all air cargo movement out of Colombo, making Emirates the largest air cargo carrier among foreign airlines operating in Sri Lanka. “The award from SkyCargo acknowledges the efforts made by our General Sales Agent, Forbes Air Services, to support the cargo division. It recognises their professional representation of Emirates consistently over the years and their ability to adapt to meet our changing needs.”  

The winner of more than 300 major international awards and one of the world’s fastest-growing airlines, Emirates operates 17 services a week from Colombo to Dubai and four services a week from Colombo to Singapore and Jakarta. In the year ending March 31, 2008, Emirates Airline globally carried 21.2 million passengers and 1.3 million tonnes of cargo

Five year warranty from Abans 

LG Flatron is the world’s first Digital Flat Television and the undisputed best selling TV in the world.  

The innovative research and technology team of LG Electronics, Korea developed the Flatron TV after years of painstaking research and planning, from which all other brands of flat TVs have been fashioned.

LG’s latest innovation in the Flatron range is the Super Slim Flat TV which has 40% less protrusion at the rear and slim enough to fit into corners of your room and places other TV’s won’t fit.

And here’s the best part of the deal.  When you buy a 21" LG Super Slim Flat TV ( 21FS4RGE) you will get a free LG Super Slim DVD Player (DV286).

Abans Ltd., sole agent for LG home appliances in Sri Lanka are offering a mammoth five year  warranty on every LG Flatron TV purchased from them. This is the highest warranty presently offered for any TV set in the market. 

LG Flatron TV’s perfectly flat picture tube eliminates outer light reflection completely. This prevents light shining directly into your eye making it comfortable for you to watch TV even for long periods without eyestrain. With a radius curvature that’s infinity, you can view the best picture quality with true-to life images from any angle anywhere in the room. No wonder LG Flatron Digital TVs are Sri Lanka’s and the world’s best selling TVs.

LG Flatron Digital Televisions are available in 15", 21" and 29" models and LG Super Slim Flat TVs are available in 21" and 29" models from all Abans Showrooms islandwide and A-World showrooms in Welisara and Crescat Boulevard. Abans offer interest free easy payment terms on all their products, including LG Flatron  TVs, to make the world’s best brands affordable and within reach of every family.

All LG Flatron  TVs  sold by Abans carry a guarantee of quality and efficient after-sales-service by Abans Service Centres and authorized service a gents islandwide.

Country’s first MDRT Life Member 

A top sales achiever at Ceylinco Life, the local life insurance industry leader, has become the first Sri Lankan to be designated a ‘Life Member’ of the Million Dollar Round Table (MDRT) by achieving the stipulated sales targets for 10 straight years. 

Ceylinco Life Wennappuwa branch Senior Sales Promotions Manager Nihal Champika Fernando brought honour to Sri Lanka by participating at MDRT, the elite forum of the world’s top life insurance sales professionals for 10 years.

Fernando who joined Ceylinco Life in 1990 as a Sales Consultant has won many accolades during his career for performance excellence. He first qualified to the MDRT in 1993 for his sales performance of the previous year and was the first Sri Lankan to attend the forum.

“ MDRT Life membership is the pinnacle of achievement worldwide for a life insurance sales professional,” said Ceylinco Life Chief Executive Director R. Renganathan.

“ Fernando’s consistency over a decade in terms of performance brings

honour not just to him, but to the country’s insurance industry as a whole.”

He said this achievement also demonstrates the value of the company’s continuing efforts to inspire and train its sales officers to increase levels of professionalism and performance.

Fernando, a father of three said: “It is rewarding to get into a profession like life insurance where I can use my abilities to the fullest. I’m glad to bring honour to my company which helped me to sharpen my talents and to achieve success in life.”

Fernando was adjudged the Best Sales Consultant of the company at Ceylinco Life’s Annual Awards for five consecutive years from 1991 to 1995. He has also been recognised as the highest premium collector at Ceylinco Life From 1994 to 2005.

In addition to these accolades, he has been awarded the LIMRA International Quality Award for five consecutive years from 2002-2006 for excellent production and outstanding persistency in the life insurance business.

The Million Dollar Round Table (MDRT), the premier association of financial Professionals is an international, independent association of more than 35,000 members, or less than 1% of the world’s most successful life insurance and financial services professionals from 476 companies in 76 nations and territories.

MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of sales excellence in the life insurance and financial services business.

Sri Lanka’s largest life insurance provider for the past four years, Ceylinco Life ended 2007 with premium income of Rs 6.8 billion, an increase of more than Rs 1.1 billion over the previous year. The company’s Life Fund stood at Rs 17 billion as at December 31, 2007. The company owns the largest branch network in the country’s life insurance sector and currently employees a sales force of more than 4,000.

CIMA equivalent to Masters degree 

The CIMA (Chartered Institute of Management Accountants) professional qualification is equivalent to a Master Degree, the independent UK agency responsible for government scoring of immigrants’ qualifications has said.

A point score of 35, the same as MSc, has been awarded to the CIMA professional qualification by UK NARIC, the independent body that assesses and scores qualifications from around the world. The UK government uses this information on its official database to benchmark qualifications held by potential immigrants to the UK under its highly skilled worker programmes.

CIMA Education Director Robert Jelly said: “CIMA is delighted to be awarded this rating by an independent body that objectively ranks the value of various qualifications. This shows the prestige the CIMA professional qualification holds in the UK and throughout the world and demonstrates the portability of the qualification, enabling individuals to work and study wherever they wish.

‘It is further proof of the relevance of the CIMA qualification to business and the strategic value our members add to organisations.  We are pleased to see CIMA achieve this further recognition from an authoritative UK government agency.’

The National Recognition Information Centre for the UK (UK NARIC) is the national agency providing the sole British official source of comparison information and  advice on international education and training systems and overseas skills and qualifications.

It is part of a wider network of information centres (ENICs) across Europe and also includes Australia, Canada, New Zealand and the USA. It helps individuals and organisations understand qualifications and skills from across the globe, enabling pursuit of employment and education opportunities in the UK.

Aspirations, a timely event

International  Education exhibition which was held in Colombo from July 5-6 and in Kandy on July 8 was an immense success with students and parents from many parts of the country attending in large numbers.

They got the opportunity to make a comparative study of the range of special advantages each country offered, which will help them to select what will best suit their individual requirements.

Those with relevant qualifications got on the spot offers in order to start studies at the earliest available intake.

Aspirations Education which has been conducting such exhibitions annually during the past is more than satisfied with the response they got, both in Colombo and Kandy,from the representatives and visitors this year.

With the meticulous planning of every aspect of this event, this year’s exhibition became a major success.

We at Aspirations are grateful to the foreign representatives for their whole hearted cooperation in participating in this exhibition and the students and parents who placed their trust on us. For any further assistance, call over at the Aspirations Education office in Nugegoda. “You will benefit from the dedicated, caring and committed service that we offer to all students, who aspire to reach their aspirations through Aspirations Education.”

It was a rare occasion where representatives from 23 universities and institutes from Australia, UK, USA, Malaysia and Singapore participated.

The organizers planned it in such a way where the students could get first hand information and details pertaining to the different universities and institutes in different countries with regard to courses on offer, levels of study available such as Diploma, Bachelors Degree, Masters, PhD and other programmes, financial requirements of each country, accommodation and recreational facilities available.

An Empire's internal war Parting of ways

Harry Jayawardena had allegedly informed the petitioners he would hold Tilak Fernando's 20% stake in trust

Jayawardena began to pursue an aggressive business strategy allegedly often testing the limits of legality

Jayawardena had allegedly presented the petitioners with a fait accompli on new investments and acquisitions

Three founder directors of the Stassen commercial empire, R.K. Obeysekere, Zaki Alif and V.P. (Totsy) Vittachi, in two separate plaints filed before the Colombo Commercial High Court recently, giving reasons as to why they want to part ways with Jayawardena said that on or about 1971 the third petitioner (Vittachi) was appointed Sri Lanka State Trading (Consolidated Exports) Corporation (Consolexpo) Chairman, which was one of the largest exporters of tea and other produce during the 1970s.

At that time Jayawardena was an executive at Consolexpo's Tea Department.

During this period Vittachi allegedly promoted Jayawardena as Tea Manager despite political resistance from the Trade Minister at that time.

On or about April 1972 the first petitioner (Obeysekere) joined Consolexpo as a Trainee Tea Taster and was subsequently appointed as a tea taster and the Tea Department's Assistant Manager where he worked with Jayawardena.

On or about March 1974, the second petitioner (Alif) also joined Consolexpo as a trainee tea taster and was subsequently a tea taster, where he worked with the other petitioners and Jayawardena.

friendship

Being employed in the same Department, Obeysekere, Alif and Jayawardena formed a close friendship. Obeysekere, and Jayawardena also formed a friendship with Vittachi who they allegedly considered as being their mentor.

In 1973 Vittachi left Consolexpo following his retirement.

The first and second petitioners and Jayawardena were largely instrumental in maintaining the large volumes of tea exports in Consolexpo, which allegedly resulted in them becoming akin to brothers rather than friends.

On or around August 15, 1977; the first and second petitioners and Jayawardena resigned from Consolexpo, since the political environment at that time did not permit them to continue their employment at Consolexpo.

In this background, the above trio approached Vittachi for advise on how they could pool their resources and export tea and other produce and thereby earn their living. As a result, the petitioners and Jayawardena decided to form an enterprise for tea and other produce exports, with the objective of becoming a medium scale tea exporter.

Thereafter they formed a private company named Stassen Exports Ltd. (ie the first respondent to this petition, also referred to as the Company in one of the two plaints, with Jayawardena being the second respondent) to carry the aforesaid enterprise.

This operation was carried out on a small scale, from a small room in a building leased by a company controlled by Haris and Arjuna Hulugalle since the Company could not afford to pay rent at that time.

The Hulugalle brothers also permitted the Company to use their staff and infrastructure facilities. Vittachi was appointed chairman of this Company. The first and second petitioners attended the tea auctions and handled all aspects of the core business of the company relating to tea exports. The first and second petitioners used the Tea Room facilities of Easwaran Bros., as they had no Tea Room of their own. These two petitioners had to use the telex and phone facilities of the Central Telegraph Office for communication with their foreign buyers.

The main reason for the first and second petitioners to allegedly bear the burden of running the entire aspect of the export operations was because Jayawardena was allegedly despised in the tea trade due to his arrogance, whilst working at Consolexpo. The second respondent allegedly never attended the tea auction after the formation of the company.

Administration

It became Jayawardena's role to manage the finances and administration of the company.

From the very inception of the Company, all its activities were allegedly conducted by the petitioners and Jayawardena acting together as partners.

All decisions were allegedly taken in mutual consultation and agreement with each other. The shareholding of the Company initially reflected the proportions in which the partners agreed to share the profits from the enterprise.

The third petitioner and Jayawardena were each allotted 20% of the issued shares of the Company. The first and second petitioners were each allotted 9.99% of the  Company's issued shares.

The second respondent had allegedly advised that he had persuaded one Tilak Fernando, a senior employee at the Tea Department at Consolexpo to join them and hat he ought to be given 20% of the Company upon joining.

Jayawardena had also allegedly informed the petitioners that he would hold the said 20% in his name in trust for Fernando until he joined the Company. This decision was agreed upon, without any suspicion or doubt.

The remaining 20% of the issued shares of the Company were allotted to the Hulugalle brothers.

The petitioners and second respondent were appointed as directors of the Company, with the third petitioner appointed as chairman, and the second respondent, managing director.

Thereafter Haris and Arjuna Hulugalle informed them that they wished to sell their shares. Consequently the first and second petitioners bought 5% each of the 10% shareholding held by Arjuna, which resulted in their respective shareholding increasing to 14.99% each, in the Company. Haris' shares were allegedly acquired by Jayawardena.

In 1978 the petitioners and the second respondent decided to form a separate company for the purpose of trading in green tea. This company was called Milford Exports Ceylon Ltd. The petitioners and the second respondent were appointed as directors, with the third petitioner appointed as chairman.

The second respondent allegedly convinced the petitioners that the second respondent would hold the 20% of the issued share capital proposed to be allotted to Haris and Arjuna Hulugalle in his name in trust, since the political situation at that time was unfavourable towards Haris, and a direct shareholding by them would be detrimental to Milford at that time. As a result of the trust and friendship between them, this proposal was agreed upon by the petitioners without any suspicion or doubt.

Consequently the second respondent held 60% of the issued shares of Milford Exports (Ceylon) Ltd., comprising his allocation of 20% and the remainder which he allegedly claimed to hold on trust as aforesaid.

Expanded

The Company thereafter expanded into a successful exporting Company, achieving a high status in the tea industry and winning the Presidential Award for export of food and beverages consecutively for five years. The  Company has continuously been among the top three tea exporters in Sri Lanka.

During that time the petitioners allegedly did not pay any attention to their shareholdings in the Company and Milford, since their personal and working relationship was akin to a brotherhood and they allegedly had implicit trust in each other.

With the rapid growth of the company and Milfords, the petioners and second respondent acting as partners decided to invest the profits and reserves of the company and Milfords in strategic investments in other companies.

The first major investment that was so made pursuant to their collective understanding was in Hatton National Bank (HNB) in 1988, to the tune of a sum of Rs. 77.7 million. As a result, the first and second petitioners and Jayawardena are directors of HNB.

The acquisition of HNB was by way of a direct purchase of shares by the company and Milfords, and by the acquisition of a company called Cargo Boat Dispatch Company Ltd (CBD) which had a substantial stake in HNB.

CBD shares were distributed between the parties, pro rata to their shareholdings in Milfords.

The first and third petitioners divested a part of their shareholding in CBD, while Jayawardena disposed of his entire shareholding. Thereafter, several other large investments were made through the company and/or Milfords, or though companies in which they had controlling interests in Lanka Milk Foods, Distilleries Company of Sri Lanka (DCSL), Balangoda Plantations Ltd., Browns Beach Hotel Ltd., Sampath Bank Ltd., Milford Holdings Ltd., Ambewala Farms Ltd., Pattipola Farms Ltd., and Sri Lanka Insurance Corporation Ltd. (SLIC).

On or around 2005, the petitioners allegedly noticed a gradual change in Jayawardena's attitude towards them and in the manner in which he conducted his affairs in relation to the company.

This change had allegedly, initially manifested itself during the period the second respondent was appointed to various positions in government and state corporations such as senior adviser to the President, the Board of Investments (BoI) and SriLankan Airlines.

Jayawardena began to pursue an aggressive business strategy, allegedly, often, testing the limits of legality which allegedly created discomfort to the petitioners.

The petitioners alleged that when they showed their displeasure at his authority, they were allegedly openly intimidated into submitting to his decisions.

The petitioners alleged that the second respondent allegedly threatened to use his majority powers in the company and his political powers through connections in government to cow them into submission.

Unilaterally

This deterioration in the relationship allegedly led to Jayawardena increasingly acting unilaterally in managing the business and making decisions that impacted the parties.

The second respondent allegedly acting unilaterally began making investments through the company, Milford Exports and other companies under the investment umbrella of these two companies and allegedly refrained to consult the petitioners in investments in Aitken Spence & Co., Ltd.; DFCC Bank Ltd., Lanka Bell Ltd., Lanka Hospitals Ltd (Apollo Hospitals) and Asiri Hospitals Ltd., all of which are held or controlled through DCSL, its subsidiary Milford Holdings and SLIC.

After completing such investments, Jayawardena had allegedly presented the petitioners with fait accompli, in the form of circular resolutions, where they were allegedly compelled to accede to, as the relevant investments had already been made and were irreversible.

The petitioners pled that in view of the relationship that existed between the petitioners and the second respondent, the petitioners at times signed numerous documents at the request of the second respondent on his representations without the petitioners allegedly verifying the contents of the said documents.

The petitioners alleged that the second respondent continued to ignore their views and sidelined and excluded them whilst proceeding to appoint other persons as directors to the newly acquired companies.

As the company's managing director, Jayawardena had allegedly continued to mismanage the affairs and funds of the company and had utilized the funds for his own purposes.

The petitioners alleged that the second respondent has procured the incorporation and operation of an entity named Stassen Distributors Ltd., set-up for the purpose of transshipment of food products. It has been set up allegedly without the knowledge or approval of the petitioners and they  were excluded therefrom. The second respondent and one Jansz are the alleged signatories to all the bank accounts of this company. The use of the name "Stassen" in this company has allegedly not been authorized by the petitioners.

In this background, the petitioners allegedly addressed a personal note dated June 13, 2005 to Jayawardena, setting out the essence of their grievances and concerns about the manner in which the second respondent was behaving, and had requested him to remedy these matters, in essence that he should cease to humiliate the petitioners, honour the rights of each of the parties as founders, provide the parties with proper and transparent return on their interests by the declaration of regular formal dividends and to consult and keep each of them informed of major investments or decisions with regard to the companies of the group.

No Response

The second respondent allegedly did not respond to this letter. Then a second letter dated July 15, 2005 too was allegedly sent, to which too Jayawardena had allegedly not replied.

Thereupon the petitioners met the second respondent in an attempt to discuss the issues between them and resolve their differences amicably.

Jayawardena had allegedly turned abusive at Vittachi, and had even threatened to shoot him. He further made it clear, that allegedly only he and he alone could give any directions relating to the Company, Milford Exports and the other companies within the group.

Thereafter the petitioners wrote another memorandum to the second respondent dated August 10, 2005. Jayawardena; in a letter dated August 20, 2005 wrote to the second petitioner Alif, addressing him as the company secretary of Milford Exports (though he had ceased to hold this position since 1987) and directing him to summon an extraordinary general meeting (EGM) to determine the outcome of the above three letters.

The petitioners thereafter received documents dated September 2, 2005; purporting to be notices of meetings, seeking to convene EGMs of the Company and Milford Exports, purporting to be by the order of the board of directors from the company secretaries of the company and Milford Exports.

The petitioners by their letters dated September 8, 2005; had informed the company secretaries that the meetings sought to be convened were allegedly mala fide and illegal for the reason that the boards of directors of the said two companies had not given any such order to convene such meetings.

The petitioners allegedly requested the companies' secretaries to immediately withdraw such notices and cancel the alleged illegal meetings that had been sought to be convened. The company secretaries had then allegedly cancelled such meetings and had resigned from their posts as company secretaries on the grounds that they were receiving contradictory instructions from the managing director and the chairman of the said companies.

At a meeting with the first and second petitioners on October 6, 2005; the second respondent had allegedly agreed to enter into an equitable agreement on how the Company and Milford Exports should be run and also to provide for mechanisms by which the petitioners could sell out their interests in the said entities, or, in the alternative, buyout the second respondent's interests in the said entities.

The second respondent by his letter dated October 8, 2005 had allegedly confirmed to the petitioners that the said principles were acceptable.

Around this time, the second respondent, allegedly acting through DCSL and SLIC which are companies controlled by the Company and Milford Exports, proceeded to consolidate control over Commercial Bank of Ceylon Ltd., by moving a resolution to remove its chairman Mahendra Amarasuriya and to substitute him with the second respondent's nominee.

The petitioners were allegedly not informed or consulted in this process. The petitioners by their letter dated October 26, 2005 had allegedly protested against this position to Jayawardena and had reiterated that they were entitled to be consulted in these processes.

In addition, the second respondent had allegedly begun intercepting correspondences that had been addressed to the third petitioner as DCSL chairman, to prevent him from responding to queries addressed to him in that capacity by Commercial Bank chairman.

Jayawardena had thereupon allegedly presented to the petitioners with fait accompli in the form of a backdated circular resolution of the DCSL Board, purporting to authorize the aforesaid course of action which the first and second petitioners had no alternative but to reluctantly sign in order to preserve some semblance of a relationship with Jayawardena, particularly in view of his agreement to the principles set out in the said letter dated October 6, 2005.

The petitioners further alleged that Jayawardena tried various methods to remove Vittachi from the boards of the company, Milford Exports and DCSL.

On December 12, 2005; the petitioners allegedly forwarded a draft shareholders' agreement with a covering letter to the second respondent as previously agreed upon and requested Jayawardena to revert to them in order to finalise the agreement without further delay.

Reversal

The petitioners received a letter dated January 16, 2006 from Jayawardena, completely reversing his alleged previous commitment made by letter dated October 8, 2005, saying that he did not wish to proceed with the agreement as the largest shareholder of the companies in question and that such an agreement was not in his interest.

The petitioners had then sought the intervention of a respected senior lawyer who had a long association with the first petitioner and Jayawardena. Consequently the petitioners were informed by the intermediary that the second respondent had allegedly agreed to work towards a settlement and that he had requested them to forward a valuation of all their respective interests in the Company, Milford Exports and several other entities through which the petitioners and the second respondent had made strategic investments.

The petitioners retained Ernst & Young Singapore to do this valuation which was completed in October 2006. The valuation was based on high, median and low valuations which came out with the figures Rs. 27.3 billion, Rs. 24.7 billion and Rs. 22 billion respectively.

Jayawardena had allegedly come up with a counter valuation from KPMG, India, which had valued those assets at Rs. 2.6 billion. The petitioners say that this valuation is absurdly low, as manifested by the fact that the offer the petitioners had made to the second respondent for his proportionate interests exceeded four times the total value given by KPMG on all the companies.

Having heard the submissions made by Counsel for the petitioners, and also having persused the petion, affidavit and documents annexed to the petition, Commercial High Court Judge Rohini Walgama issued notice to the respondents returnable on August 29, 2008, to show cause the reliefs prayed for by the petitioners against the respondents should not be granted.

The petition was supported by Romesh De Silva (PC) with lawyers Chanaka De Silva, Sugath Caldera, Aruna Samarajeeva, Shanaka Cooray, Eraj De Silva, instructed by lawyer G.G. Arulpragasam.

Covering service, retirement age, directorates

SC gives three year extensions to bank directors

Seylan Bank Director R. Renganathan filed a fundamental rights (FR) application and cited The Monetary Board of Central Bank of Sri Lanka (CBSL), CBSL Governor Ajith Nivard Cabral, Treasury Secretary Dr. P.B. Jayasundera and the Attorney General for allegedly violating his fundamental rights, in making unlawful actions by issuing certain directions under the Banking Act., allegedly by the Monetary Board of CBSL

Renganathan also alleged that the provisions of the Code are discriminatory in that: State banks and local  branches of foreign banks are treated differently and there is no level playing field.

The said FR applications came up for hearing before a Bench comprising Chief Justice Sarath N. Silva and Justices Nimal Gamini Amaratunga and K. Sripavan recently.

Having heard the submissions made by all parries and also having perused the petition, affidavit and series of documents annexed to the petition by the petitioner, Court made the following orders. "The petitioners have filed these applications alleging an infringement of the FR guaranteed by Article 12(1) of the Constitution in respect of certain directions issued by the Monetary Board of CBSL under Section 46(1) of the Banking Act No.30 of 1988 as amended.

The original direction had been issued on December 26, 2007 and an amendment had been issued to the said direction on April 23, 2008. An infringement is alleged in respect of three matters that pertain to persons holding office of chairman/director of any Bank.

They are: The direction in paragraph 3(2)(ii), that the total period of service of a director (other than a chief executive officer) shall not exceed nine years inclusive of the period of service upto January.1,.2008. The amendment of April 23,.2008 exempted an executive director as well. A further exception was included in the amendment in respect of a founder director or an incumbent chairman for a period of five years to be allowed on an application to the Monetary Board.

Court was of the view that since the past period of service was been taken into account, a reasonable time should be allowed to incumbent directors who have or will complete nine years within the operative period to make for alternative arrangements without the necessity of making an application for exemption.

Hence it was suggested that in lieu of the exemption in respect of a founder director or incumbent chairman, a general exception be introduced in respect of any director who has completed nine years as at January 1,2008 or who completes such term at any time prior to December 31, 2008 (being the operative period) that they may continue for a further maximum period of  three years from  January 1,.2009.

The Director in paragraph 3(3)(i) which fixes the maximum age of any director at 70 years with certain transition provision as contained in the direction and further transitional provision in paragraph 3(9)(v) introduced by the amendment provided for exemption to be granted on an application.

Since this would result in the vesting of a discretion, on the same reasoning stated above, a general exemption should be introduced in respect of persons who reach 70 years as at  January1,.2008 or who would reach 70 prior to December 31,.2008; may continue in office for a further maximum period of  three years from  January 1,.2009.

The direction in paragraph 3(3)(ii) as to the number of companies in which posts a director may hold:. On the same reasoning, an exception may be granted in respect of any person who held posts in excess of the limitation to comply with the direction and notify the Monetary Board within a maximum period of three years from January.1.2009

A general provision may be included that if for any reason such as ill health or other incapacity the Monetary Board considers that exemptions referred above should not be availed of, such ground may be notified to the person and after a hearing the Monetary Board may limit the period of exemption.

The Monetary Board to issue an amended direction incorporating the suggestions noted above The amendment should be to the original direction dated December 26,.2007 and be in lieu of the amendment of April 24,.2008.

Court also ordered to mention this application September 1, 2008 to ascertain whether the amendment suggested by the Supreme Court has been complied with by the Monetary of Board of CBSL.

In the said  FR petition, the  petitioner has alleged that no proper opportunity was given to the public, depositors and/or share holders to make representations and/or observations prior to the introduction of the Code and no due process was followed and therefore bluntly violated the cardinal principal of natural justice.

The petitioner also alleged that the said Code has a retrospective effect and the said Code violated the provisions of the Company law and the said clauses in the Code are without any basis, unreasonable and unlawful and were brought in without recourse to the rules of natural justice and thereby breached the legitimate expectations of the  petitioner as a  director of Seylan Bank.

The petitioner also alleged that the pith and substance and the effect and the ulterior motive of the introduction of the new provisions to the Code by the Monetary Board is in effect to exclude Dr. Lalith Kotalawala and his team including the petitioner from the Seylan Bank Directorate and thereby take away the very foundation in which the Ceylinco Group is based which forms the very basis of the trusts in the Bank by millions of depositors and it will hamper the present and future projects of Ceylinco Group and present structure of Seylan Bank will be adversely and irremediably affected.

Romesh De Silva (PC) with lawyers Sugath Caldera, instructed by lawyer. G.G. Arulpragasam appeared for Renganathan and also for Anil Kariyawasam who is another petitioner.

Wijeyadasa Rajapakse (PC) with lawyers Kuvera De Zoysa, Senaka De Saram and Asela Rekawa appeared for Ravindra Lal Michael Wickremasinghe Dissanayake who was another petitioner.

Mohan Peiris (PC) appeared for the Monetary Board of CBSL, CBSL Governor and the Treasury Secretary. Senior State Counsel  Harsha Fernando appeared for  the Attorney General.

PCH teams up with Reliance

PCH Holdings, a leading conglomerate and its subsidiary Greenwich Lanka (Pvt.) Ltd (GLPL), recently announced  the partnership with Reliance Communications India to market world renowned Reliance Internet Data Centre (IDC) to offer a full range of services including managed hosting, co-location, disaster recovery, business continuity, security, storage, IT consultancy, content management, professional support and a range of application services.

A data centre is a facility used to house computer systems and associated components, such as telecoms and storage systems. Security, integrity & availability are indispensable components of an internet data centre (IDC). This state of the art IT infrastructure generally includes redundant or backup power supplies, redundant data communications connections, environmental controls like air conditioning, fire suppression, floods and special security devices. The IDC technology would result in reducing infrastructure cost as the solution also includes hardware components with added benefits due to power saver and energy efficient technology.

PCH Holdings Chairman. S.H. M Rishan said, "We are pleased to be a part of Reliance Communication India. The partnership enables us with access to knowledge sharing which will be a win-win situation for both the parties and our clients. We are one of the largest integrated solution providers in Sri Lanka offering the best of ICT infrastructure solutions and a range of IT business applications. This tie-up makes us and our customers stronger, as it signifies to redefine IDC in Sri Lanka".

Reliance is a global leader in IDC, with a vast knowledge in building and maintaining IDCs around the sphere for over seven years. Their clients include global leaders in banking, travel, transportation, insurance, financial services, healthcare, telecoms, media and entertainment, manufacturing, retail and IT services segments. In an era with the need for high data security, instant accessibility to data and reliable accurate information, innovative and top-notch technology solutions to the Sri Lankan market will enhance productivity in many data sensitive industries.

Reliance Communication India Executive Vice President Sanjay Sharma said, "By appointing PCH Holdings as our business partner in Sri Lanka, I believe we will be bearers of a philosophy that thrives on new technology, teamwork, and partnerships. PCH Holdings is a company that sets new expectations and exceed them, consistently. We are pleased to work with its subsidiary GLPL, as they have no compromise on technology, security & quality. At Reliance, we believe in defining our client's expectations accurately and beyond, regularly. Our processes are certified by most of the industry's respected consultants".

"Reliance Communication is one of the largest and most experienced conglomerates in the world exceeding its customer's expectations through innovative solutions. The reliability and high capacity has prompted PCH Holdings to tie-up with this global player in order to provide our growing clientele with a world class, flexible & dynamic IDC solution. The partnership provides us with the opportunity to deliver a range of services spanning the entire information and communication value chain," said Greenwich Lanka (Pvt.) Ltd., Director Thariq Sanoon.

 "We will establish a data centre with high-level data security. This will help us to offer managed services and hosting both locally and globally. The partnership allows us with access to service adaptation with replication servers in India which is a tailor made personalized solution."

From the beginning to the end of a project, all GLPL activities are guided by a databank of best practices. This helps in meeting technical, quality, time, cost targets, and provides more value to customers.

GLPL's mission statement promises to provide the best in technology, quality, and security.  Recently Greenwich Lanka announced that it is on the verge of obtaining the ISO/IEC 27001:2005 certification, becoming the only Sri Lankan system integration solutions provider to be certified for quality standards for process and information security.

Another first by Tigo

The new regulations introduced by the TRC require mobile customers to submit to the law enforcement authorities proof of ownership of the mobile phones they are holding. The new regulations are to protect the consumer and in the interests of national security.

Tigo is prepared to implement the new regulations. Tigo is committed to protect its subscribers of any inconvenience that may take place in the future and we are delighted to inform our customers that we have been successful in developing a system that will protect and support our customers in light of the new regulations.

We are proud that in a very short time we have developed a system to issue current and new customers with a Certificate of Ownership. This will be a plastic card containing the customer's name, mobile number, NIC or passport number.

By issuing a plastic card we ensure that it is durable and easy to carry around. This card will help a Tigo customer prove the ownership of the mobile he/she is carrying at a road barrier or any such location if requested by police or any other law enforcement authority. To further facilitate this process we have created a short code which when dialled from a tigo mobile phone results in an immediate message displaying the mobile phone number.

All current Tigo customers are encouraged to re-register their connections at the Tigo head office, Tigo Zone and any of the 29 main dealer locations and obtain an ownership certificate without delay. The ownership certificate will be issued  free of  charge and re-registration is required to ensure compliance with the new regulations, especially since our current subscribers may not have the connections in their names. 

For new subscribers, they will be issued first with a temporary certificate upon buying their activation and provision of the necessary identification documents. This temporary certificate is valid for three months after which a permanent certificate will be issued.

We believe that ensuring convenience and protection to our customers is our first priority. Therefore we are proud that we have been able to develop a comprehensive system for our customers and to those that wish to get connected to us in the future.

This new card that is being issued will also be used by Tigo to offer lots of other benefits to our customers. These benefits will be unveiled by Tigo very shortly.

FedEx expands in Europe

FedEx Express, a subsidiary of FedEx Corp. (NYSE:FDX) and the world's largest transportation company, recently announced two major European hub projects to meet the growing demands of European business, a major expansion to its European hub in Roissy-Charles de Gaulle, Paris, and a state-of-the-art environmentally friendly facility in Cologne.

The expansion at Roissy-Charles de Gaulle by September 2009 and the building of a major new facility at Cologne by spring 2010, announced at an event hosted at Roland Garros, will dramatically increase capacity at the two hubs, ensuring that FedEx Express can continue to provide a seamless service for customers who wish to access European and global markets while minimizing impact on the environment.

The European Commissioner for Economic and Monetary Affairs said that in 2007 the European zone recorded its fastest economic growth rate since 2000, and that Europe was sharing in the benefits of the trend towards greater globalization.As manufacturers continue to move towards a global sourcing and production model, the demand for fast and reliable transportation services is increasing, critical to the growth and success of European industry.

European trade performance brings greater business opportunities both within Europe, and in the global marketplace.FedEx continues to build its network across Europe to support this growth with sustainable development of its hub facilities across the continent.

"These major developments of hubs at the very heart of our European operations demonstrate our commitment to playing a central role in the future growth of the continent as a whole," said FedEx Express Europe, Middle East, Indian Subcontinent and Africa president Robert W. Elliott.  "At both Roissy-Charles de Gaulle and Cologne, we believe we have found innovative and practical solutions to our need to expand our operations that are good for business and the environment."

The relocation of FedEx Express main hub for Central and Eastern Europe from Frankfurt to Cologne will allow FedEx Express to create a state-of-the-art facility with the very latest environmental design to meet the rapidly growing demand for express services in Germany and Eastern Europe.

As FedEx continues limited operations at the Frankfurt International Airport, the new facility will bring new jobs to the Cologne/Bonn region and further improve working conditions for employees.

The facility at Cologne is estimated to feature a 1.4-megawatt solar power system with the capacity to produce 1.3 gigawatt hours of electricity per year, enough to power more than 370 homes each year. The new ramp and sort facilities which will be built on 50,000 square metres, will include 16,000 square metres of roof space for solar panels.

The Roissy-Charles de Gaulle hub is already the biggest outside of the USA.

With the extension work, which was launched by Aroports de Paris at the request of FedEx, sorting capacity will be increased from 24,000 to 31,500 packages per hour and the sort area from 49,000 to 72,000 square metres. The hub's new sorting systems will be ready for September 2009.

The FedEx expansion at the Roissy-Charles de Gaulle hub maintains its commitment to minimizing impact on the environment, with more than 250 liquefied petroleum  gas-powered and electric-powered ground support vehicles at the hub, accounting for 62% of its ground support vehicles.

TMC Wisdom '08

The Management Club will hold its annual Quiz competition 'Wisdom 2008, at the Galle Face Hotel on September 13.

Formed under the auspices of the Chartered Management Institute UK, Sri Lanka Branch, in February 2002, TMC regularly organizes training programmes, seminars and evening presentations which help its members to enhance their skills and provide them with learning opportunities from many experienced and leading personalities in diverse fields.

The Club initiated its first ever table Quiz competition two years ago, and Wisdom 2006 proved to be a success which attracted as many as 38 teams. The enthusiasm shown by the participants and the response the programme drew from various sectors prompted TMC to repeat the competition in September last year and also to make it an annual event in their events calendar.

WISDOM 2008 will take the same form as in the preceding years-five rounds of questions consisting of Current Affairs/Sports and Games/Science (including Astronomy and Space)/History, Arts, Literature and Entertainment, and General Knowledge

It will be a team quiz with a maximum of 5 members in a team. The questions will have to be answered by the team members collectively and the quiz will be open to teams from banks and financial institutions and mercantile establishments (both private and public).

In addition  schools and educational institutions and groups of individuals.

The winning team will be awarded the "TMC - Wisdom 2008 Challenge Trophy" plus cash awards to the first five teams.

There will also be trophies awarded to winners of each sector. The quiz master for the event will be Ruwan Senanayake, a TMC founder member who is also the Sri Lanka representative of the International Quizzing Association, UK. Details can be obtained from the TMC Secretariat, Galle Face Hotel. 

In Brief

CSR & customer loyalty

Many organizations today, especially in the garment sector, have recognized the importance of corporate social responsibility (CSR) and sustainable development in its  "true" spirit.

This has enabled them to enhance retention, customer loyalty and achieve better employer-employee relationship.

Brandix Apparel Ltd., CSR Manager Ms. Anusha Alles speaking at a seminar organized by the Chartered Institute of Marketing recently said commitment and support at the strategic level are vital for suitable development of an organization as the benefits are often non-quantifiable and not oblivious like expenses.

Call rates to increase by 25 bp

With foreigners allowed to open tax free rupee accounts (ie free of the 10% withholding tax), the US dollar was trading at a low Rs. 107/55-60 levels at Friday's trading due to expected dollar inflows as a result of this move.

Meanwhile, with the surplus liquidity of Rs. 4.5 billion experienced by the market on Wednesday (there was no trading on Thursday because of the Poya holiday, overnight (O/N) call money market rates, the rates at which commercial banks lend to each other for a day, increased by 25 basis points (bp) over its Friday  morning figure of 13.50%, to close the week at 13.75%.

Market sources expected O/N call rates to increase by a further 25 bp at tomorrow's trading and to hit 14% due to this illiquid position.

They however expected the dollar/rupee parity to remain stable and to continue at these levels.

3G services in Jaffna

Dialog Telekom announced the launch of its 3G/HSPA service in Mannipai, Jaffna following the setting up of its 530th 3G Base Station in the locality.

 Dialog earns the distinction of being the first mobile service provider to provide 3G services in Jaffna.

Dialog Telekom Group Chief Executive Dr. Hans Wijayasuriya said, "We pioneered mobile communications in Jaffna in 2002 and have enjoyed the loyal patronage of Jaffna consumers ever since. Likewise Dialog has invested heavily in the region and will continue to do so in to the future. With the introduction of 3G and HSPA, customers in Mannipai will be empowered with the very latest in mobile communications and broadband technology on par with the most advanced 3G networks globally."

Dialog's 3rd Generation network currently spans across Greater Colombo, Kandy, Galle, Kurunegala, Anuradhapura, Nuwara Eliya, Monaragala, Ampara, Trincomalee and most recently Jaffna, along with many other towns in Sri Lanka.

Ceylinco Insurance raises Rs. 1.1 bn.,

Ceylinco Insurance PLC recently successfully concluded the Non-Voting Share Issue which started on June 20 of this year.

The share issue, the largest ever of a non-voting nature in the history of Sri Lanka was subscribed to the tune of Rs.1.13 billion, at the time of its closure.

The value of a share, offered at Rs.175, was the highest price recorded for a non-voting issue.

Ceylinco Insurance-General Division Chief Executive Director Ajith Gunawardena said that given the current context of the economy, the endeavour had been a complete success.

Ceylinco Insurance is the undisputed market leader in both General and Life Insurance in the island, recording a total turnover of over Rs.17.2 billion last year, with a profit after tax figure exceeding Rs.1 billion.

Former ADB President dead

Former Asian Development Bank (ADB)President Tadao Chino (74) died in Tokyo on Thursday .

He served as ADB President from 1999 to 2005. In his tenure, Chino visited Sri Lanka three times.

Chino's involvement in ADB dates back to the institution's creation.

In 1964, Chino, as an officer of the UN's Bangkok-based Economic Commission for Asia and Far East (ECAFE) laid the groundwork for  establishing a regional development bank. His efforts led to the founding of ADB in 1966.

Addressing new challenges, Chino oversaw the adoption of the  institution's private sector development strategy in 2000.

ADB President Haruhiko Kuroda said, "Chino will be sorely missed by this institution and the people who have known and worked with him. He was a strong voice for eradicating poverty and his influence continues to be felt today."

CCC AGM

Chief Justice Sarath N. Silva will be the chief guest at the Ceylon Chamber of Commerce's (CCC's) 169th AGM that will take place tomorrow at the Cinnamon Grand.

Illicit fags

Customs officers have confiscated more than 4.7 million sticks of illicit tobacco  valued at Rs.135.3 million  from January to June 2008. The unpaid duty and taxes on these cigarettes would have resulted in a loss of Rs.111.7 million.

Zero emission

World Wise Marine, a partner in the Offshore Ship Designers group (Holland), has launched a new harbour tug design which it says will cut emissions to zero during most of its operating hours.

The Hydrogen Hybrid Harbour Tug developed by WorldWise Marine working with Dutch tug operators Iskes and Smit, is a 50 tonne bollard pull tug fitted with fuel cells and hydrogen tanks. (Marine Talk)

Airlines seek dormancy waiver

Citing unprecedented increases in fuel prices and increasingly difficult economic conditions, several US airlines recently filed a joint application with the Department of Transport USA (DOT) for a temporary blanket dormancy waiver applicable to their frequency allocations and other limited entry international authority for a period of two years beginning as soon as possible.

The applicants-American, Continental, Delta, Northwest, United, US Airways and Alaska would notify DOT by February 15, 2010 if service will be suspended on routes subject to dormancy conditions after June 30, 2010, and would not object to temporary re-allocation of unused frequencies or dormant limited-entry route rights to other airlines during the waiver period.

"In these perilous times, airlines should not be required to operate flights that are uneconomic during periods of low demand to preserve their long-term investments in operating rights," they said in the filing.

Other US carriers showed support for the blanket waiver, but an objection filed by Spirit Airlines called the move "anticompetitive in what are already the most restricted U.S. aviation markets." (Washington Aviation Summary)

News LINE

CEPA before Cabinet

The Comprehensive Economic Partnership Agreement (CEPA) document is before the Cabinet for approval, an economist said.

Institute of Policy Studies (IPS) Executive Director Dr. Saman Kelegama told a meeting on Friday that it was to have had been signed on Wednesday, but for some reason it had been delayed.

He was unsure as to whether it would be signed this Wednesday.

Once its signed it would be made a public document, he said.

Earlier, Kelegama lost his cool with this reporter, when he was asked, or rather, when Central Bank Governor Ajith Nivard Cabraal was queried as to why CEPA was not being made a public document, which question Cabraal deflected to Kelegama.

Kelegama in a counter asked why reporters did not query as to why the Ceasefire Agreement or the Indo-Lanka Free Trade Agreement wasn't made a public document before it was signed.

This meeting was the AGM of the Indo Lanka Chamber of Commerce & Industry where Cabraal was the chief guest, with Kelegama also being present.

400 duty free items from India

India will be able to export an additional 400 items to Sri Lanka on a duty free basis from this week, culminating in the completion of the duty free list governed under the Indo-Lanka Free Trade Agreement (ILFTA) from the Sri Lanka side, A Finance Ministry official told The Sunday Leader on Monday.

India's obligations on this aspect, ie in regards to exports from Sri Lanka was totally fulfilled in 2005, he said.

However, there are no duty concessions for items appearing under the negative lists of both countries.

But Sri Lankan exporters say that though they are able to export certain items to India on a duty free basis, such exports become uncompetitive due to state taxes imposed by state governments which are not governed under the ILFTA for such imports.

As a counter, cess' are imposed from the Sri Lanka side to protect local manufactures from being swamped by cheap Indian imports.

Tiger's tail

China's trade surplus with Sri Lanka is spurred by imports such as machinery, a Chinese diplomat said.

And if Sri Lanka does not import such products from China, it would in any case have to source such items from elsewhere, Ms. Zhan Yun, Commercial Attache of the Chinese Embassy in Colombo, addressing a seminar last Wednesday said.

Yun said that according to Chinese Customs statistics, imports from Sri Lanka to China last year amounted to US$ 921 million while exports from Sri Lanka to China amounted to US$ 35.5 million.

The imports figure from China excludes the import of defence stores by Sri Lanka from China. China and Pakistan are the principal defence stores suppliers to Sri Lanka.

Student pop. up 2,900