Provision to revive
sick cos. in new law
The proposed new
Companies Act will have a clause to revive sick companies.
Lawyer K.V. Nihal
Jayawardene speaking at a seminar on the new law on Wednesday said
that provision is there for the creditors, acting on their own, or
together with the existing shareholders to form a new board of
directors and infuse more capital as a last attempt to revive such a
But if that attempt
fails, then there is no choice, other than to liquidate such a
company, he said. Jayawardene who had been in the Company Law
Advisory Commission that was responsible for drafting the new law
(their work began as far back as 1993), said that the existing
Companies Act does not have provision to bail sick companies.
The present Act,
which came into being in 1982, had been formulated, based on the old
Companies Act of the UK of 1948. He further said that in addition
the Law Commission which is headed by the Chief Justice, plans to
draw-up a wholly new law, based on the USA’s Chapter Seven and
Chapter 11 bankruptcy laws, which aims at reviving sick companies,
instead of closing them down.
The present Companies
Act is not user friendly and there is a greater need to keep up with
the times, said Jayawardene. The size of the proposed application
form to set-up a new company is only of the A 4 paper size. It is
investor friendly and simplifies the incorporation process, he said.
This is in contrast
with the current memorandum of association, which asks the applicant
a lot of unnecessary details, with several of the object clauses
that has to be completed, being of no use. However, in the proposed
law, there is no necessity to state the objects of the company. That
way their business activities are not restricted. Investor interests
are protected in the proposed Act by providing escape clauses. This
is in the event the company deviates from its original line of
business and starts on an altogether new line of commercial
activity, the investor can then exit from the company by selling his
shares to the company or to its shareholders. It also has provisions
for minority buyout rights and solvency tests, the latter, in order
to ensure that the company is healthy from a financial point of
view. And in order to facilitate "genuine" investors, the
proposed law also has provision for pre-incorporation contracts.
There is also
provision for the setting-up of a Companies Dispute Board in order
to solve disputes through mediation or arbitration, rather than
going through the costly and long drawn out process of seeking
redress in courts, Jayawardene said.
13 years in limbo
The story of the
proposed new Companies Act which is yet to see the light of day has
a history spanning a period of no less than 13 years.
Lawyer K.V. Nihal
Jayawardene who has been a member of the Company Law Advisory
Commission since 1993, when it was decided to reform the present
Companies Act, told The Sunday Leader that the draft law was
originally presented to the then Commerce Minister Kingsley T.
Wickramaratne in 1997.
However, for two
years no action was taken by the Ministry to make it law. They
finally got activated in 1999. But then the Presidential Election
was held in 1999 and subsequently several other elections, that
resulted in the draft Act once again going back into limbo.
In the meantime, SLMC
leader Rauf Hakeem was appointed as Commerce Minister and
Jayawardene in 2001 brought to his notice about the proposed law.
But then Hakeem crossed-over to the opposition and a new government
came into power towards end 2001, said Jayawardene. However, the
then newly appointed Commerce Minister Ravi Karunanayake was
interested in making the proposed Act law, but was stopped in his
tracks by the then Finance Minister K.N. Choksy, who said that the
proposals were not compatible with English law. Jayawardena was
however confident that despite these delays, the new law would
ultimately see the light of day in another two months time. This
law, now, is in the form of a bill in parliament, and has met with
no opposition. Jayawardena said that the proposed law, in form,
except for some minor changes, is no different to the draft that had
been presented to Wickramaratne nearly 10 years ago, in 1997.
Defence bill to
zoom to $ one bn.
Central Bank (CB)
bought Rs 2.5 billion worth of treasury bills last week, thereby
fuelling inflationary pressure, but at the same time keeping yield
According to reports,
the defence bill, which was originally pegged at $ 70 million this
year, may zoom to $ one billion due to the escalation of the
conflict, hence government measures to keep interest rates down, due
to borrowing from the market to meet increased defence commitments.
The CB in a press
release describing the treasury bill auction said that the weekly
primary auction for the week ended September 22 for the re-issue of
Rs. 6,718 million maturing treasury bills was held on September 20.
The auction was
oversubscribed with bids amounting to Rs. 10,755 million being
received. Rs. 3,280 million treasury bills were accepted from the
market, Rs. 2,450 million purchased by the CB and the balance Rs.
988 million retired.
Bids received for 91
day bills amounted to Rs 4,409 million, the amount accepted Rs 1,411
million at the weighted average yield (WAY) of 10.53% per annum, the
same as that of the previous week.
For 182 day bills,
the value of bids received, Rs 3,409 million, amount accepted, Rs
1,361 million at a WAY of 10.65%, the same as the previous week and
for 364 day bills, the value of bids received, Rs 2,937 million,
amount accepted, Rs 508 million at a WAY of 10.71%, the same as the
previous week. The CB said that no bids were accepted at the
two year treasury bond auction held on September 19, though the
auction was over-subscribed, with bids received totalling Rs 1.2
billion as against the offered amount of Rs 1.2 billion.
No hope without
peace for market
With no progress in
the peace front, resulting in a negative impact on the economy in
general and on the stock market in particular, the market registered
a low Rs 189 million turnover at Friday’s trading. Turnover was
"boosted" because of two local purchases of JKH shares
comprising parcels of 200,000 and 150,000 each and executed at Rs
132.50 a share, contributing Rs 46.4 million ( 25%) of turnover.
Foreign purchases were a lowly Rs 14.1 million and sales, Rs 2.1
million. The benchmark ASPI closed at 2,329.18 points, 0.09 points
down over Thursday’s closing figure, while the more sensitive MPI
closed at 2,911.59 points, 2.79 points down over its previous
figure. Among the main contributors to the day’s turnover were JKH
Rs 65 million on a share volume of 496,800. JKH closed at Rs 132.50,
50 cents less than its previous . Touchwood, Rs 39.9 million on a
share volume of 346,600; Touchwood closed at Rs 116, Rs 5.50 more
than its previous . Investor interest on Touchwood was on
speculation in the backdrop of its AGM due on Friday and its recent
announcements of a "three for one" bonus issue.
HSBC arranges $ 25
HSBC and Sampath Bank
recently announced the successful completion of a $25 million
one-year committed term loan facility for Sampath Bank.
A statement said that
the success of this loan epitomises HSBC’s resourcefulness as well
as the bank’s continued commitment to develop and support the
local financial industry. The Hongkong and Shanghai Banking
Corporation Ltd., is the founding and a principal member of the HSBC
Group which, with over 9,500 offices in 76 countries and
territories, and assets of $ 1,738 billion at June 30, 2006, is one
of the world’s largest banking and financial services
HSBC has had a
presence in Sri Lanka, spanning over 114 years. The bank has 10
branches, one HSBC Premier Centre and 13 "day and
night" automated banking centres. With strong local and foreign
currency lending capabilities and an extensive global network, HSBC
has a comprehensive range of financial solutions as well as a strong
reputation with the competence to provide working capital and/or
trade financing in Sri Lanka. The awards HSBC has won in the areas
of cash management, trade services and global markets bear witness
to this repute. The Bank has been named the Best Cash Management
Bank in Asia (2003-2006) and Best Bank for Payments and Collections
in Asia (2003-2006) by Global Finance. Sampath Bank is one of
the forerunners in the local banking industry and enjoys an ‘AA’
local currency debt rating by Fitch. The Bank is reputed for
introducing state-of-the-art electronic banking delivery channels
amongst local commercial banks.
results for the year ended December 31, 2005 reflects a healthy and
an improving performance in terms of both income growth and asset
quality. The bank recorded a profit before-tax result of $14 million
in 2005, an increase of 33.5% from 2004. Loans and Advances grew by
32% to $ 553 million whilst customer deposits also grew at a similar
pace ($ 625 million). During this period, the Bank’s equity grew
by 45% to $ 59 million, largely due to rights issued and retained
profits. Reported Tier I and 11 capital as at December 31, 2005 were
10.86% and 15.14% respectively.
offers Mercedes among others
The current Hatton
National Bank (HNB) Pathum Vimana (PV) draw is offering gifts
worth well over Rs. 80 million, said a statement.
H.M.N.D. Bandara who
was the winner of the Audi A4 under the mid year regional draw
obtained his gift from HNB Managing Director Rajendra Theagarajah
and Assistant General Manager Financial Services and Business
Development Sridharan at the PV prize giving which was held at HNB
Even better, there is
a sleek Mercedes Benz worth millions up for grabs in the year end
premium draw. Eligiblity is the maintaining of a balance of Rs
100,000 in a savings account or Rs 50,000 in a current account.
Having been active for 14 years, PV was brought to the fore in 1993.
HNB’s growing network of branches which currently stands at 151
has helped PV reach to an increasing number of masses.
The scheme has been
structured to ensure that PV will reward "you, your family and
the nation." The main ethos of this veritable scheme is to
"teach the masses the habit of saving and offering rewards for
benefit is that besides getting interest on savings, you also get
rewarded with a range of superlative gifts. Up to the present day,
HNB has given away 53,456 gifts including 50 houses and 90 vehicles
since 1993 under the PV scheme. These aforementioned prizes sums up
to Rs. 662 million.
PV, being held for
the fourteenth successive year, follows the pattern set by the
preceding schemes in giving more people more chances to win bigger
prizes. This is followed by the "Mid Year Regional Draw"
with prizes of nine Maruti cars - one for each of the nine provinces
and a total of 18 refrigerators, 45 washing machines and 180 gifts
vouchers worth Rs.10,000 and 225 rice cookers. HNB has throughout
its existence signified a more focused and privileged place for the
customer in the bank. The assurance by the Bank was three-fold: To
open the door of opportunity wider, to accelerate processes that
have helped Sri Lankans progress in life and an emphatic underlining
of commitment to increase the outreach of the Bank’s considerable
influence and penchant for innovation to bring even more benefits to
account holders - from all walks of life. The Bank substantiated
this with a broad outline of their prize plans. PV for instance is
an easier way for thousands to graduate to a better lifestyle, by
offering more chances to win, to more people in more places.
Dedicated to offering
premium quality to many, HNB stands firm in its quest to give better
and finer things for the development of the people, the economy and
also the nation.
Abans, $ 70 mn. co.,
Abans has established
itself as a diversified group with 26 companies organized within
four strategic business units comprising Trading, Manufacturing,
Services and Real Estate Development. It is also involved in
Abans has over a $ 70
million turnover and more than 6,000 employees under its wing. Most
of the Group companies enjoy leadership position in their respective
markets. Abans Office Automation (AOA) is the authorized distributor
for many leading mobile phone brands in Sri Lanka and a business
partner of Dialog since 1997.
AOA also has the rare
distinction of being the authorised agents for three of the world’s
top five mobile phone brands Motorola, Sony Ericsson and LG.
Additionally the company offers a selected range of Nokia phones and
are the exclusive agents for LG, Panasonic and ZTE mobile phone
brands in SL.
So far, Abans has the
widest range of mobile phones in the country, with over 90 models
that are available through their showrooms islandwide. Director /
General Manager Abans Office Automation G. P. Daniel told The
Sunday Leader that no other company in Sri Lanka offers such a
wide range of mobile phones under one roof. "And we have
showrooms spread across the country, so a customer can reach us at
the closest Abans showroom and have access to the best phones in the
Daniel also said that
AOA has the largest direct sales force and are also the largest
importers of mobile phones to the country. "For those of you on
a hunt for a mobile phone, AOA would be the ideal first stop on your
shopping spree as the company holds the largest retail network which
includes six Dialog arcades, 16 exclusive mobile phone showrooms, 11
Dialog franchise showrooms and over 100 Abans showrooms across the
country, not forgetting their dealer network.
It’s more or less a
one-stop phone shop, where customers can find the largest selection
of phones, all of which are compatible with Sri Lankan service
providers, starting from basic phones to smart phones all under one
Daniel said that
apart from this, customers also have the benefit of buying phones on
three to 12 months interest free schemes through HSBC, AMEX and BOC
All mobile phones at
AOA come with a 12 month warranty and "excellent" after
sales service support. "When a customer buys a phone from us
they can be rest assured that their money is well spent on an
original phone. I think what’s kept us on top all these years is
the fact that we have always offered a wide range of quality
products with flexible payment options. Our retail network reach has
helped greatly as well." AOA was the first to launch the
latest, high end camera phone and smart phones like the Sony
Ericsson K 790i, P 990i and the Motorola A1200.
also sells CCTV cameras and Remote Surveillance Solutions and
PABX systems. Despite stiff competition, the growth of this company
has been phenomenal since its inception in 1997.
recruitment popular among corporates
Internet job sites
are popular in many countries, but Sri Lanka never had an
e-recruitment site that covers all levels of jobs – executive and
professional to clerical, a statement claimed.
But now "topjobs,"
Sri Lanka’s first executive and professional jobs, careers and
recruitment site is receiving "tremendous" attention. Top
companies- Aitken Spence, Dialog Telecom, Ceylon Tobacco, Eagle
Insurance, Colombo Stock Exchange, Delmege Forsyth, McLarens and
other well-known companies and recruitment agencies are using its
website for electronic recruitment. For jobseekers, the site is
unique for conveniently browsing hundreds of local career
opportunities in a user-friendly and well-organised jobs databank.
They can apply online, while uploading a CV, photograph and
certificates, and the application is sent electronically to the
employer’s HR team. Job seekers can create an account for free,
and monitor online their status – for example if they are
short-listed. New jobs are added daily and are visible 24 hours
daily. For employers, the site is an electronic back-office solution
that automates all activities in the recruitment process. Employers
are notified of applications immediately and through a secure
back-office control centre can list and view applicants, compare
applicants using standard profiles, grade applicants (by an
automatic and customizable grading system), do shortlisting,
schedule interviews and record results, make e-notes about
applicants and send feedback emails in a paperless environment. The
efficiencies and cost savings gained from using an electronic system
are significant. GENESIIS (a Finco Group subsidiary) Marketing
Manager Shah Navaz says: "The site is receiving hundreds of
applications daily and the numbers are doubling . Our topjobs
employers have successfully filled vacancies using the site . It is
a cost-effective solution as it’s fully internet-based and no
hardware installation is required on the employer’s