Sri Lanka Newspapers Sunday 13/05/2012

Promises action if rules have been breached

The Colombo Stock Exchange (CSE) Friday rejected a contention of one of its former chairmen, Mr. Rienzie. T. Wijetillake, on the NSB – TFC deal published in The Island of May 11.

"The CSE regrets the manner in which the said article seeks to misrepresent the functions and duties of the CSE, to the public,’’ a statement from the Exchange said.

It has been stated that the CSE had "failed in their duties" and "not done its duties on the day of the suspicious deal". All share transactions are carried out by licensed stock broker firms based on the determinations of buyers and sellers. In this regard, the role of the CSE is to ensure that these transactions are executed on the Automated Trading System (ATS) of the CSE in conformity with the applicable Rules.

The ‘order matching’ takes place in a completely automated environment and hence, the CSE cannot intervene in the execution of a particular transaction. In the circumstances, the CSE could not have "halted" the deal in question "for a few hours to conduct a special research reasoning on the deal", as claimed by Mr. Wijetilleke.

Additionally, the Central Depository Systems (Pvt.) Ltd (CDS), a fully owned subsidiary of the CSE, has suspended NSB from carrying out any CDS functions as a CDS Participant with effect from May 8, 2012.

Whilst denying all allegations made against the CSE in the article, the CSE assures the public that, in the event of any violation of the CSE/CDS Rules, necessary action has been / will be taken by the CSE, as deemed appropriate.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=51761

Land acquired in N’Eliya and Bentota

The Abans group which is now a widely diversified conglomerate is looking at entering the tourism industry by building hotels on land already acquired in Nuwara Eliya and Bentota, the group’s Chairperson, Mrs. Aban Pestonjee revealed last week.

It is also going into shopping and entertainment malls in Colombo with a foreign partner, she revealed.

She said that the group which grew to its present stature by dealing in electrical appliances is now focusing in introducing more eco-friendly and energy saving products in the context of rising electricity and oil prices.

Abans have also decided to diversify into shopping and entertainment malls in Colombo and have already identified a couple of sites for this purpose. This project will be in collaboration with a foreign partner, Mrs. Pestonjee said.

"Due to the vast opportunities and prospects of growth in Sri Lanka, we have decided to diversify and set up shopping and entertainment malls in Colombo," she said. "Sri Lankans have very little entertainment to select from and we want to create a place where families and even teenagers can hang out and spend time enjoying themselves."

Currently, the group’s energy saving range comprises home appliances which the company claims save up to 60% of electricity consumption. On offer are LG inverter air conditioners, LG side-by-side refrigerators, LG green lon door cooling refrigerators, LG Tromm washing machines and LG light wave microwave ovens are some of the innovative products that the company claims will enable substantial savings on electricity bills.

Mrs. Pestonjee said that her vision was to see Sri Lanka become a prosperous nation and a business hub in Asia and she expressed the hope that all Lankans here and abroad will work in unison to bring the country to a peak of prosperity we have never seen before.

The group which employs over 15,000 has set up an Academy where staff can learn information technology (IT), English and other skills necessary for career development.

"Our staff is not employed to remain in the same position for the rest of their careers," Mrs. Pestonjee explained. "We want them to develop themselves."

She said that their training Academy is particularly helpful to people in the North and familiar with languages other than Tamil. A program has been created where employees in the Western and Southern Provinces can exchange places with employees from the Northern Province affording an opportunity for people to learn English and Sinhalese.

"This not only provides more jobs but also unifies the Sri Lankan community by breaking down the language barrier," a group news release said.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=51762

Control to remain with current stakeholders

Sanasa Development Bank Limited has posted 21% deposit growth in 2011 increasing deposits to Rs.15.2 billion from Rs.12.6 billion the previous year and increased profit after-tax 6.8% to Rs.345 million from the previous year’s Rs.323 million, the bank announced.

The bank anticipates listing on the CSE in the context of the Central Bank directive for all banks to be listed. Senior officials said that considerable energy is being devoted "to meet this eventuality, again with the primary intention of retaining controlling power among its current stakeholders, key among who are the varied and extensive members of the larger Sanasa Movement."

Despite the increased net profit, the pre-tax profit was down to Rs.537 million from the previous year’s Rs.646 million due to an overall staff salary revision and the commencement of depreciation of the new core-banking system which Sanasa said was a necessary investment expected to deliver greater efficiency and better returns over time.

The bank had concentrated on strengthening existing units rather than expanding its branch network during the year under review. But new customer centers had been established at Buttala, Hataraliyadde, Hingurana, Narammala, Kaduwela and Aluthgama.

"In 2011 we have concentrated on provincial expansion and will continue to focus on this area in view of the fact of the development activities taking place in the provinces," the bank said in a news release.

"As a result we further strengthened the regional management system by giving more authority to regional managers, because their role will be different and more challenging in time to come."

In particular, it is envisaged that regional mangers will work closely and cohesively with regional offices, such as Provincial Councils, GAs, AGAs and Grama Niladaris in order to strengthen public-private sector partnerships.

Sanasa’s total capital base had grown to Rs.3.06 billion during the year from Rs.2.18 billion a year earlier with tier one capital continuing to increase.

The year under review saw Sanasa paving the way towards offering ATM and Debit Card facilities to its customers with the bank announcing that all required documentation is in place. Facilities have been made available from last month with the bank installing its own ATMs in ten branches and sharing ATM services with the Commercial Bank elsewhere.

ATM services are now available to Sanasa constituents at the bank’s Head Office in Kirulapone, First Colombo City, Jaffna, Karapitiya, Ambalangoda, Matale, Kurunegala, Kegalle, Anuradhapura and Polonnaruwa.

Sanasa customers will also have access to 500 ATMs operated by the Commercial Bank.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=51764

Sri Lanka’s central bank kept its key policy rate unchanged at 9.75 percent saying monetary conditions are tightening and credit growth will moderate, eventually helping the exchange rate.

Sri Lanka’s exchange rate came under pressure and the Central Bank lost foreign reserves as loan growth and imports were accommodated and accelerated with central bank credit (printed money) after sterilized forex sales started in August.

In March with a partial float of the currency, central bank money injections to the economy reduced, with sterilized sales falling away. The rupee however fell to 130 to the US dollar from 110 due to pressure from sterilized forex sales.

Total loans taken by the private sector, the central government and loss-making state enterprises shot up to 140.9 billion rupees in January, but has since fallen to 115.1 billion in February and to 110.7 billion in March, according to Central Bank data.

The March loan totals may include possible forex losses on dollar loans.

"With respect to monetary developments, market interest rates have moved up gradually, reflecting the tightening of monetary conditions," the Central Bank said in its March monetary policy statement.

"Benchmark Treasury bill yield rates have increased and in turn, deposit and lending rates of commercial banks as well as other financial institutions have shown an increasing trend."

Even if total loans do not fall as long as loans are matched by deposits, the exchange rate will not come under pressure as aggregate demand will not be change, but there will be shift from consumption to saving.

Though policy rates were only raised 125 basis points to 9.75 percent Treasury bill yields have topped 12 percent, a rise of around 500 basis points since August and dealers say money that fled the Treasuries markets to banks are now returning.

The Central Bank has also stopped buying Treasury bills to print money after April and allowed interest rates to rise, eliminating the key trigger of instability in the monetary system. In late April the rupee came under renewed pressure from money printed to pay April state salaries.

The Central Bank said that "policy measures implemented thus far are sufficient to moderate the expansion of both credit and the trade deficit," and it expects both monetary aggregates and imports to slow the course of this year.

It will also "closely monitor monetary and external sector developments and adopt further measures if necessary in the months ahead."

The central bank said broad money supply grew 22.8 percent in March from a year earlier, but is expected to slow. Consumer prices rose 6.1 percent in April from a year earlier.

– LBO
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=51768

A committee is probing a controversial stock purchase more than 60 percent above market price by a state bank, with payment on the deal stopped on Treasury instruction, a minister said.

Deputy economic development minister Lakshman Abeywardene said Treasury Secretary P B Jayasundera ordered state-run National Savings Bank not pay for the purchase The Finance Company stock because the process was flawed.

He said Treasury secretary P B Jayasundera had halted the payment pending the inquiry for which a committee has been appointed he said.

Opposition legislator Harsha de Silva, has called for the resignation or removal of NSB chairman Pradeep Kariyawasam over the deal.

He said that that any probe should not be compromised because he was the husband of Sri Lanka’s chief justice.

De Silva who had earlier questioned several deals involving stock purchases by the Employees Provident Fund said the latest was only the ‘tip of the iceberg.’

The stopped payment on the controversial deal caused a rumpus in the settlement system of the Colombo Stock Exchange with Sampath Bank, the settlement bank paying the sellers.

Sellers included, Dinal Wijemanne, a stockbroker who was a director and businessmen Rayynor Silva and Anura Fernando.

Minister Abeywardene said the deal could be reversed if wrongdoing was established.

Sri Lanka’s main business chamber, the Ceylon Chamber of Commerce has also asked for wrongdoers to be identified.

– LBO
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=51769

The Regional Development Bank (RDB) recently opened a branch at Kattankudi increasing its branch network to 266 making the RDB number three in terms of the number of branches, the bank announced.

The RDB absorbed six provincial development banks to become a national bank with a wide reach in most parts of the country.

Speaking at the Kattankudi branch opening, Ms. Keshala Jayawardena, the RDB Chairperson invited villagers in the area to visit the branch to obtain financial support for agricultural, fisheries, livestock, trade and SME projects.

She stressed the importance of inculcating the savings habit especially among children and younger people and said that the bank was offering a variety of savings products with higher interest rates than competitors together with other attractions.

Over a thousand bank accounts were opened on the day the branch opened at Kattankudi.

New branches have also been opened recently by the RDB at Kanakarayankulam and Valaichenai.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=51774

CSE.SAS wrote:By Quintus Perera
A top Sri Lankan boat manufacturer, specializing in luxury yachts and exporter, has slammed what he calls a “grossly unfair” decision to allow duty-free import of marine vessels. Such a move, he warned, adversely affects Sri Lanka’s boat making industry and exports because of the availability of cheap, imported marine craft, in the local market.

Neil Fernando, Chairman, Boat Building Technology Improvement Institute (BTI) and Chairman, Penthouse Group of Companies, made these comments at the launch of the Boat Show Sri Lanka 2012 held in Colombo this week.

He said this senseless action of the government could ruin the boat building industry, especially pleasure boats manufacturing which have gained a ready export market, throughout. He told the Business Times on the sidelines of the media briefing that they could not see any adducible reason for this ‘senseless’ action of the authorities when the local boat builders have to pay duty for all their equipment and spares for their trade. He said that they are having negotiations with the government to stop these ‘duty-free imports’. Otherwise he said that their industry would be doomed.

The Boat Show 2012 organized by BTI in collaboration with the Lanka Exhibition and Conference Services and supported by the Ministry of Industry and Commerce and the Export Development Board, is scheduled to be held from 18 to 20 May at the BMICH.

This is the third time the Boat Show is held and it has attracted leading industry suppliers in the region to display a wide range of products at the exhibition.
http://www.sundaytimes.lk/120513/BusinessTimes/bt14.html

ooh yes they will impose tax on them after their family and henchmen have imported enough of them.,we did not born yesterday!

By Shamindra Ferdinando

U*N*P parliamentarian Harsha de Silva yesterday said that the government would have no option but to quickly reach an understanding with those benefited from the controversial NSB-TFC (The Finance Company) transaction if it really wanted to settle the financial crisis.

Swift and bold action on the part of the administration would be needed to prevent the clandestine deal from causing further damage to the crisis-hit CSE, he said.

Asserting that President Mahinda Rajapaksa couldn’t cancel the transaction by ordering the NSB not to pay, the National List MP urged the government to go through the transaction and then get those beneficiaries to buy back what they had sold to the NSB. That couldn’t be a problem due to close relationship among all those involved in the transaction, he said, adding that the UNP and the JVP would go all out on this issue both in and outside parliament. The UNP called for a one-day debate on the issue on May 23.

Responding to a query by The Sunday Island, the consultant economist warned the government that presidential intervention could destroy investor confidence in the stock market. The MP pointed out that the S*L*F*P led U*P*F*A could have averted a major crisis had it cancelled the deal within the next working day, Monday (April 30) as the transaction was finalized on Friday (April 27).

"Don’t forget I exposed the corrupt transaction on April 29. The government had ample time to cancel the deal. In fact, The Island issue of April 30 carried a statement issued by me regarding the corrupt deal. The government knew what was going on, though it didn’t act."

Asked whether there had been a similar case before, the first treasurer of DFCC emphasized that there was no previous deal on the same lines, though there were many irregular, illegal and controversial transactions over the years.

The bottom line was that since the transaction the value of TFC shares had further dropped to Rs. 25 a share, the UNPer said alleging the government was making a ridiculous attempt to drag-on the issue in spite of catastrophic repercussion it could have on the money market.

The MP said: "All of us should be concerned about the purchase of close to eight million shares of The Finance Company by the NSB at 65 percent above its current market price. What logic was employed to pay Rs 49.75 for shares of this high risk and loss making financial institution when it was last traded at the Colombo Stock Exchange for only Rs 30.00 is more than a puzzle. But by Friday the value dropped to Rs. 25. The ongoing controversy will make the situation worse."

Asked whether any other financial institution had been affected by the transaction, the MP pointed out that Sampath, which functioned as the settlement bank had paid those who sold shares to the NSB over Rs. 390 mn believing the NSB would pay it.

"The money market operates on trust. Sampath acted on that basis and if the NSB, on a government directive, refused to pay Sampath that’ll create an unprecedented crisis. It will cause a rift between Sampath and those who received money for shares sold to the NSB."

Responding to another query, the MP urged the Bar Association of Sri Lanka (BASL), the Committee on Public Enterprises (COPE), Public Accounts Committee (PAC) and major organizations, such the Organization of Professional Association (OPA) to state their positions.

The MP pointed out that the deal had come to light amidst the ongoing debate over COPE report, which exposed waste, corruption and irregularities in the public sector.

The NSB was answerable to the people of this country, he said, the UPFA should be ashamed of allowing its members to engage in clandestine deals at the expense of the national economy, which was now struggling in the wake of global financial crisis and poor economic management back at home.

A top executive of a company said that the former Chairman Cyril Herath would be turning in his grave about what had happened. Herath and the GM at that time played pivotal roles in building the NSB, while the present lot was busy undermining the very institution which they were supposed to further strengthen, he said.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=51813

Thanks for merging my posts.
Salute for your usual service,bringing the newspapers early as possible.
Thanks.