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Controversial Lycamobile boss here for Hutch deal
View(s):Amid a ringing controversy, the Britain based Lycamobile owner Subaskaran Allirajah, arrived in Sri Lanka on Friday for meetings related to a possible business agreement with Hutchison Telecom Lanka.
Before his arrival in Sri Lanka, the Sri Lankan-born millionaire businessman was in Hong Kong—where Hutchison’s parent company is based. Hutch, as it is called, has been up for sale for several years. It was nearly snapped up by Sri Lanka Telecom-owned Mobitel under the previous Government but Mahinda Rajapaksa, the then President, cancelled the sale.
After the change in regime, the new management of Mobitel restarted the process. But it soon turned controversial with some company board members alleging that Sri Lanka Telecom/Mobitel Chairman P.G. Kumarasinghe was in cahoots with other board members who wished to buy Hutch at an inflated price.
The dispute that followed—complete with shouting matches at meetings—resulted in those opposing the Chairman and his loyalists being sacked from the board. Mr. Allirajah is not without controversy himself. In October, Buzzfeed carried a three-part investigation into the mobile virtual network operator’s business. The online publication filmed three bagmen secretly dropping off rucksacks stuffed with hundreds of thousands of pounds twice a day at post offices across London. After the reports, Prime Minister David Cameron was under pressure to return thousands of pounds in donations made to the party by Mr. Allirajah.
Buzzfeed also said that Sri Lankan authorities, notably the Financial Crimes Investigation Division, were investigating Mr. Allirajah’s links with members of the Rajapaksa family. He has denied any wrongdoing.
Telecommunications and Digital Infrastructure Minister Harin Fernando, confirmed that the Lycamobile team was in Sri Lanka. He said they were likely to have met members of the Hutch parent company in Hong Kong. The Minister said Mobitel was still interested in Hutch but the matter had been handed over to the high-powered ministerial Committee on Economic Management which was headed by Prime Minister Ranil Wickremesinghe.
“We have given the Economic Committee the proposal. Mobitel has requested the Sri Lanka Government to buy it. The board is happy to buy it. The economic committee has appointed another committee comprising such officials as R. Paskaralingam, Finance Ministry Secretary R.H.S Samaratunga and two other retired experts. They are expected to report back to the Economic Committee,” he said.
The Minister said there were three factors to consider when purchasing Hutch. “You can look at its spectrum, its asset value, or its customer base to value the company,” he added. “The spectrum value is between 72 and 105 million dollars. The asset value, according to a PricewaterhouseCoopers study, is around 115 to 135 million dollars. The customer base is minimal. They have about 400,000 customers.” “Why Mobitel needs Hutch is for the spectrum,” he said. “Mobitel cannot survive without spectrum. It has only 28 percent of market share while Dialog has 48 percent. Our spectrum band is full.” All wireless communications travel through spectrums or radio frequencies.