Apollo Hospital risks de-listing

Sources close to the Colombo Stock Exchange have confirmed that Apollo Hospital has not supplied mandated documentation and declarations to the Colombo Stock Exchange.

By the powers vested in the CSE, Apollo must supply the information no later than August 16. However, in the absence of a properly constituted Board, it is highly likely that the deadline would not be met – and that the repercussions would be tremendous, especially the impact on the Apollo share price.

The majority shareholder of Apollo Hospital is Sri Lanka Insurance, with 54.6%. The Harry Jayawardene led Distilleries Company of Sri Lanka is the other dominant shareholder with 28.8% of the shares.

The problem that Apollo is faced with, is that they need a properly constituted Board. Despite the Treasury Secretary having made his recommendations, the Sri Lanka Insurance Chairman, Kariyawasam has not yet appointed a Board to take charge of Apollo Hospitals’ day to day running.

Sources close to the legal fraternity in Colombo are also hotly debating whether all these pressures on the Apollo Hospital, could in fact have a more sinister motivation – as the very act of placing a company on the "Default" list is an early warning system for investors on the stock exchange.

In case they are placed on this list, the impact on the share price would be significant – the share would be valued at far less – making the time right for an opportunistic investor or a related party like Distilleries Company to make a move and pick up shares at a low price and perhaps end up in control too. Sri Lanka has not ever delisted any company, whilst having around 10 companies on the Default board. Sources at Stassens, the main Jayawardene led corporate, have indicated that there have been internal, high-level discussions concerning the making of an offer for the majority stake in Apollo Hospitals.

The prices of electricity and fuel may be increased soon following the government’s undertaking to the International Monetary Fund (IMF) to stop all Treasury subsidies to the Ceylon Electricity Board (CEB) and the Ceylon Petroleum Corporation (CPC) and to bring the two institutions to a break even position by 2011.

The government in its Letter of Intent (LoI) to the IMF outlining its programme when accepting the US$ 2.6 billion stand by facility from the Fund has said, "The government’s policy is to ensure that state owned commercial enterprises run efficiently and do not rely on subsidies from the Treasury.

Specifically, the aim is to ensure that Ceylon Electricity Board (CEB) and the Ceylon Petroleum Corporation (CPC) break even by end 2011."

An official from the CPC told The Sunday Leader that the current losses incurred by the CPC amount to approximately Rs. 65 billion including the outstanding dues from other state institutions.

The official stated that the only way to bring the institution to a break-even position was to increase fuel prices and to sell shares in the stock market.

Petroleum and Petroleum Resources Minister Fowzie told The Sunday Leader that although the Corporation was making a profit in the refinery, it was still incurring losses in fuel sales.

He also said the Treasury had stopped subsidising the CPC since August 2007.

However, when asked as to how the government planned to bring the CPC to a break even position by 2011 as stated in the LoI to the IMF, Fowzie said he was unaware of the government’s undertaking to the Fund.

"I am not aware of this clause in the IMF LoI. I was not even informed of such a move. I cannot comment on it without even seeing what has been said about the CPC," he said.

The other institution referred to by the government, the CEB, owes a sum of Rs. 42 billion to the CPC.

CEB authorities say that if the CPC stops providing fuel at subsidised rates to the CEB, there would be a necessity to increase electricity tariffs in order to be in a break-even position.

CEB Chairman, E.A.S.K. Edirisinghe told The Sunday Leader that he could not give any cash figures at the moment, because, if the present fuel prices and increase in hydropower generation continued, the CEB could record a cash neutral situation this year.

However, he said that if the CPC stopped providing subsidised furnace oil to the CEB, it may compel the Board to increase tariffs.

"But I think we would not have a problem. As I said, if the present conditions prevail, we will be able to record a cash neutral budget," he said.

India has made a payment of Rs. 117 million to the Government of Sri Lanka for a military-cum civilian runway rehabilitation project in the Jaffna peninsula, an Indian High Commission official confirmed.

However High Commission Spokesman Dinkar Asthana was unable to say if the money was part of a series of installment payments. ‘It has been said that the money is earmarked for the Palaly Runway Rehabilitation Project.’

Palaly is used by both civil and military aircraft to carry passengers to Jaffna. It is also the main Air Force base in the Jaffna Peninsula. The money is slated to be used for civil and military runway rehabilitation and reconstruction.

Director General, Media Center for National Security, Lakshman Hulugalle was unaware of the transaction when he was contacted by The Sunday Leader.

Military Spokesman Brigadier Nanayakkara declined to speak on the matter and directed The Leader to the air force spokesman.

However, Air Force Spokesman Janaka Nanayakkara said that such a monetary transaction, if any, would take place between the two countries’ governments. He added that until the Treasury contacted the Airforce, they would have no knowledge of this matter.

Civil Aviation Authority of Sri Lanka (CAASL) Chairman, Lal Liyanarachchi has submitted his letter of
resignation to Aviation Ministry Secretary Ranjith Silva early last week.

Silva confirmed to The Sunday Leader that Liyanarachchi had forwarded his resignation letter early in the week. However, he said Liyanarachchi had not stated a reason for his decision to resign from the CAASL.

According to Silva, the CAASL generally undergoes a reconstitution process after a certain period of time and said the resignation could be a part of that process.

"He has not given any reason for resigning and I do not know anything more than that. I have however received the resignation letter," Silva said.

Many attempts by The Sunday Leader to contact Liyanarachchi for a comment failed.

However, it is believed that Liyanarachchi’s resignation was due to issues that surfaced following his objection to the decision arrived at by the Sri Lanka Air Force (SLAF) to fly civilians between Colombo and Jaffna on a commercial basis without an Air Operations Certificate (AOC).

The operation of passenger flights without an AOC is in total violation of the International Civil Aviation Organisation (ICAO) procedures.

Liyanarachchi had in writing objected to the Aviation Ministry Secretary of the SLAF’s move to carry civilian passengers on a commercial basis without the necessary approval.

Liyanarachchi maintained that an AOC was a required specification for any commercial flight operator.

The University Teachers for Human Rights (Jaffna) in Special Report No: 33 re-leased on August 4, three years to the date since one Muslim and 16 Tamil ACF workers were shot execution style at point blank range in Mutur, maintain the investigation that followed was a travesty of justice and an indication of the future of minorities in Sri Lanka.

Three years ago, on August 4, 2006 around 4.15 p.m, one Muslim and 16 Tamil ACF aid workers were forced to their knees, begging for their lives, and shot execution style at point blank range in their office compound in Mutur, Sri Lanka. The victims of this crime were not caught in cross fire, killed accidently or mistaken for combatants in the midst of an encounter. They were sought out and murdered. Available evidence points to the responsibility of police officers and Muslim home guard members who acted in the presence of Army commandos.

The UTHR report points out that, in this, or any premeditated crime of this nature, the state has a responsibility to independently determine the facts of the case and the identity of the perpetrators. The government has not only failed to fulfil this duty, it has obstructed efforts to do so through the Presidential Commission of Inquiry (CoI), the report states. Currently, turning the scales of justice completely upside-down, the government is pointing the finger at the organisation for which the victims worked, the ACF, and accusing it of negligence. In light of the government’s recent claim that the CoI has found the LTTE to be fully responsible for this crime, the UTHR report through a thorough review of earlier reports, together with new evidence gathered and assessed, affirms its earlier findings that the 17 aid workers were killed by at least one member of the Muslim home guard (Jehangir) and two police constables (Susantha and Nilantha) in the presence of military commandos

The report stands by its earlier concerns regarding the cover up of bullet types used by the assailants and unprofessional nature of the Australian expert’s decision to retract his earlier identification of a 5.56 mm bullet.

This report also critically examines the CoI proceedings and actions by the government in the context of the CoI’s efforts. In addition to favouring witness testimonies at the CoI that were sympathetic to the government’s position, the Government of Sri Lanka and its proxies it says engaged in systematic intimidation and harassment of witnesses and families that had refused to support the government’s patently false position.

The government made sure there was no proper witness protection in place, and any support by a commissioner for a witness facing fear and isolation was used to discredit both. The police investigation unit of the CoI came to function as an intimidation unit towards the witnesses, making sure that the truth was suppressed. The presidential order to stop video conferencing of testimony by witnesses who had to flee the country was another blatant move to suppress the truth.

The UTHR report further states that family members of victims were harassed and threatened to such a level that their lives in Trincomalee became unbearable and some were forced to flee the country. The report adds that in an attempt to debunk evidence that consistently pointed to State responsibility for the ACF murders, the government has carried out a series of actions through the CoI including attempts to provide or assert alibis for certain persons the UTHR named as the killers in their report in April 2008; attempts to advance the time of the killings to make the LTTE’s guilt more plausible; attempts to post date by two days the police’s knowledge of the killings; attempts to discredit the finding that commandos were involved by denying that the commandos ever went out with the Muslim home guard.

The Treasury Secretary Sumith Abeysingha returned to the island on Saturday, after a successful four day trip to China. The Sri Lankan delegation secured Chinese funds for the Colombo-Katunayake Expressway as well as the bunkering portion of the Hambantota Port. Issues surrounding the release of further funds for the existing construction was addressed with the government agreeing to pay the insurance premiums that the Ports Authority was having difficulty in meeting.

The meetings held with the Exim Bank, were led by Sumith Abeysingha — a domain previously belonging to the disgraced former Treasury Secretary P.B. Jayasundera. The names of the other members of the delegation were not released at the time of going to press.

Low voter turnout was witnessed at the Jaffna Local Government polls with monitors stating only 25% exercising their franchise.

Monitors however said the local government polls in Jaffna and Vavuniya and the Uva Provincial Council polls were conducted in a relatively peaceful environment. This was the first time that the people in Jaffna and Vavuniya exercised their franchise after the war.

Campaign for Free and Fair Elections spokesperson, Keerthi Tennekoon said the polls were held relatively peacefully except for a few incidents.

"Only 22-25% of a total of 104,000 of registered voters exercised their franchise in Jaffna," Tennekoon said. However, monitors said the voter turnout was around 50-55% in Vavuniya, Badulla and Moneragala.

"Except for Jaffna, all the other places, namely, Vavuniya, Moneragala District and Badulla District witnessed voter turnout of more than 50%," Deputy Executive Director, People’s Action for Free and Fair Elections said.

Tennekoon further said while there were no problems in Jaffna, the situation was tensed in Vavuniya owing to clashes between the supporters of SLMC and Minister Rishath Bathiudeen.

The effort to keep funding in pace with the gigantic needs of the over 280,000 IDPs is not an easy
one, according to donors as well as implementing agencies. The task is made even more difficult if donors feel that their funds are not making any tangible changes to the lives of the displaced and also as Sri Lanka drops down the ladder of important global emergencies.

Last month, the head of the UN agency for emergency assistance, John Holmes said that Sri Lanka was one among the ‘forgotten emergencies,’ while releasing the annual report of the UN’s Central Emergency Relief Fund (CERF). Sri Lanka’s need assessments shot up by $ 120 million with the mass exodus from the Wanni and the needs will not go away fast.

Donors last week called for the early return of IDPs while the Common Humanitarian Action Plan (CHAP) midyear review stated there was a $ 173 million funding gap. The CHAP funding was revised to $ 270 million from the initial $ 155 million, following the massive influx of civilians from the Wanni between October last year and mid May. The report said only $ 97 million had been received, leaving a gap of $ 173 million.

The report stated that the revised CHAP would include projects to assist up to 100,000 people in support of the government’s plan to return the majority of the IDPs to their places of origin before the end of the year.