7th November 1999
"Then I took some of the fruit I ate." Eve regretted her move for she knew that she had sinned. Unlike in the biblical story, Adam and Eve's descendants eat apples (in mythology said to be the forbidden fruit) without feeling guilty about it.
Sri Lanka's generally pious community too have got into the apple cart as they are eating up more of the forbidden fruit. No, not because Satan persuaded them to, but due to the bounty of the fruit at very low prices.
The streets of Colombo and other popular market places around the country have seen a dramatic change in the range of fruits available for sale. The screens of greens and yellows of the mango and papaya, which covered many a walk, has been replaced with the reds and greens of apples.
Selling at prices as low as Rs. 10, this one time luxury commodity which people looked forward to eating when somebody came from abroad, is now, well, lets just say it has lost its juice.
However, apples continue to attract the buyer for its price and its convenience to the traveler, especially because it is widely available at all major and minor transit points. Statistically speaking Sri Lanka's apple consumption went up by approximately 3.1 million kilos of apples in 1998 over the previous year 4.1 million kilos.
The quantity of Sri Lankan produce however is drying up. Many local produce such as Bananas, pineapples and papayas droped in volume in 98 over the previous year. Papayas especially dropped from 31 million fruits to 27 million fruits during the period.
Asian Alliance Insurance Co. Ltd., Sri Lanka's newest insurance company, will open its doors for business next month and hopes to market its services through insurance brokers, company officials said.
"We will concentrate on the broker/intermediary market and form strategic and technical alliances within this sector," Chairman Allen Pathmarajah told the media last week.
Tailor-made solutions for all clients will be the focus of Asian Alliance. The company promises to offer service and security with a product line, which is both affordable and innovative.
Pathmarajah said, dealing solely with brokers is not a new concept. "In Australia 80% of the life insurance is sold through intermediaries, it's the same in the UK and other developed markets. It's the way to go in the future."
The tailor-made products will cater to across the board income groups, Executive Director, Dilhan Senaratne said. "It will be more on a personal line for businesses, houses, offices - a package policy that can be used by all".
He said, Asia Alliance will have a separate unit which will deal with brokers. A person from the unit will visit the client with the broker to ensure a comprehensive service is provided. "We may not be the cheapest but we will certainly be competitive," he said.
Asian Alliance will operate with an initial Rs. 150 mn capital of which Asia Capital holds 66%, Richard Pieris & Co. 26% and private investors 6.3%. The company would launch as a general insurer and introduce composite life and general company insurance by mid 2000.
Seneratne said the share capital will then be raised to Rs. 200 mn. Asia Capital will reduce its 66% stake to 50% and thereby offer the balance to a strategic partner. "We are talking to two commercial banks in this regard and we hope to get a listing within 1 1/2 years," he said.
By Mel Gunasekera
The Securities and Exchange Commission (SEC) plans to crackdown on errant companies who continue to delay submitting their audited financial accounts.
The measures come in the light of the Colombo Stock Exchange (CSE) recently publishing a list of forty three companies who have not submitted their audited accounts for the March 31, 1999 financial year.
The errant companies have been given time till November 30, 1999 to file delayed accounts, SEC Deputy Director General, Ajith Perera told The Sunday Times Business.
Most of these companies have problems in consolidating their accounts, CSE Director General, Hiran Mendis said.
But, there were a few regular violators among the forty three, raising alarms among financial circles that the authorities continue to be lenient on the issue.
Perera says, that the SEC will write to companies who are guilty of the same offence as last year, reminding them that they have continued to violate the Exchange rules. "If they continue to delay filing the accounts, we will take appropriate actions thereafter," he said declining to elaborate plans further due to confidentiality.
Mendis says publishing a list of offenders is the first step, the next would be to suspend the companies and then de-list them. He said, that the CSE is giving top billing for companies to increase their public float.
His comment came under criticism from financial analysts who said, that it was the duty of the CSE to protect the investing public. "How can they (CSE) ask the public to participate more in share issues, when they are not interested in pulling up regular offenders?" one financial analyst said adding that the CSE should pass a rule to make the directors liable if they fail to publish their accounts.
Financial sources say the SEC has the necessary legislation to bring errant companies to the notice of the Registrar of Companies, to force them to publish their accounts.
This method has been successful in the past, with companies including Upali Investment Holdings fined and made to toe the line.
However, the fines are inadequate. Violators have to pay Rs. 500 per day for each day they delay in filing accounts.
A suspension or de-listing route is usually the last resort. If a company is suspended the minority shareholders have no way of disposing their shares. If de-listed, the directors can buy out minority shareholders at their leisure or not buy them at all.
Two years ago, the CSE took a lot of flak when they de-listed nine companies for not submitting their accounts. While most of these companies had ceased to operate, one company Upali Investments Holding begged for additional time and since then continues to trade.
Analysts say regular offenders are simply not interested in remaining on the exchange as a quotation is not as attractive as it used to be many years ago.
Celltel Lanka has secured more than US$ 10 mn to fund the next phase of their network expansion plan, CEO Michel Schluter said.
The funding has come from Celltel's parent company, Millicom International and a group of foreign banks.
Celltel which presently uses an analogue network will use the funds to upgrade its network to 3G (third generation) latest GSM technology............... Schluter says they hope to begin operation by first quarter next year.
Celltel, a BOI company, is 99.8 per cent owned by Millicom International based in Luxembourg but traded on the Nasdaq stock exchange. The company has invested around US$ 50 mn todate.
Last year, the company raised Rs. 450 mn from Hatton National Bank to fund its expansion programme. Schluter says they would go to the local banks for further funding if necessary, but the funds for future capital investments will come from their parent company.
Being the pioneering company in the local cellular industry, Celltel has secured around 90,000 customers todate.
Worldwide cellular growth is predicted to overtake fixed access lines and the numbers are expected to top 1 billion subscribers by year 2000. However, the Sri Lankan cellular industry has seen a modest growth notching 174,202 as at end 1998. Despite the tariffs being one of the lowest in the region, market penetration is a dismal 0.8 per cent, compared to an industry average of 2 percent.
Local cellular operators have been lobbying for free incoming calls to increase market penetration.
The industry has also been suffering losses over the past years. Though net losses hovered around Rs. 1 bn, the net accumulated losses for the past three years touches Rs. 3.5 bn, industry sources said.
Some cellular companies offer free incoming calls for a limited period in a bid to lure customers as well as to increase the usage of cellular phones. Free incoming calls are absorbed by the companies themselves, further eroding their revenues, the operators told a recently telecom watchdog public hearing.
The industry is hopeful, free incoming calls would buck the trend to increase penetration and reduce accumulated losses. (See also Communications Pg 4). (M.G.)
By Shafraz Farook
The Inter Terminal trucking row is continuing because the Sri Lanka Ports Authority (SLPA) has failed to implement a parliamentary decision. The Association of Container Transporters (ACT) have requested the SLPA to implement the parliament's decision to hand over the inter terminal trucking business to the truckers who performed the task prior to the take over by the P&0.
ACT officials said that the SLPA has taken over three weeks and still not implemented the decision. In a meeting with the SLPA Vice Chairman M.I.M. Rafeek ACT officials have been promised action on November 9.
The association in a letter to Mr. Rafeek has requested that 75 percent of those affected by the issue be approved to operate if statistics and logistics were the problems in delaying the implementation of the parliament's decision. The letter added that due to this unethical change over, the single contractor who was entrusted with the inter terminal trucking is enjoying this business for the last two months.
The ACT said that once the percentage of those to be approved to carry on business was approved, the companies would be able to adjust the final allocation of vehicles accordingly.
The row between the Association of Container Transporters (ACT) and the SLPA on the issue of inter terminal trucking began in August when inter terminal transportation was handed over to a single party as opposed to the previous system where many operators were involved.
However, SLPA and the South Asia Gateway Terminal (SAGT) agreed to take over and manage this responsibility to enhance the quality of services provided by the port and to stem the decline of the transshipment volumes. For this purpose, SLPA and SAGT setup the CITO and thereby called for quotations from existing trucking operators, officials told the Business desk when the problem first began. Competitive bidding by the transporters saw the contract go to one of the parties who had quoted the price at almost half the previous price.
The SAGT came into the picture because Sri Lanka handed over part of the country's main Colombo port to a private consortium in a $240 million deal under a 30-year lease on a build, operate and transfer basis.
The group is carrying out a feasibility study for a new breakwater at the Colombo port and to build a new passenger terminal at the quay.
Be vigilant watchdog
Hearings were recently concluded on the proposed "calling-party-pays" billing system for cellular phone operators.
The watchdog commission is of the view that the system should be adopted- the loss of revenue to cellular networks notwithstanding.
But the networks are not too pleased and subscribers may face a backlash in the form of raised call charges, if the watchdog is not vigilant.
Too much print business
The printing industry is in a quandary these days- because they have too much business on their hands!
This is the season diaries, greeting cards and calendars are in vogue but all that takes a backseat now- because polls are around the corner, and with it comes plenty of contracts for posters and pamphlets.
Most printers say the latter is a better business- because profits do not depend on sales. As a result there is likely to be a shortage of local calendars heralding the dawn of the new millennium.
No to cheap bread
Their may be no sunshine budget this year -only a vote of account- but concessions for the consumer will still be there in the form of periodic price reductions of essential items. After all, it is election time!
And the good man who looks after trade suggested that even the price of bread could be reduced to the elusive three rupees and fifty cents- for a limited period of time, of course!
But others said no to that idea- it was too blatant an election ploy, they said.
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