News

SOLO-U aims to find peace and economic prosperity in Sri Lanka

"We feel we can no longer allow the situation to deteriorate any further," Lalith Kotelawala, chairman of the giant Ceylinco group and founder chairman of SOLO-U (Society for Love and Understanding), told reporters at the launch ceremony.

The new movement is also asking the government to provide relief to Sri Lanka's struggling industries - hit by rising costs and cheaper imports - in rescheduling debts and urging politicians to pay taxes like any other citizen.

"We see an absolute violation of human rights when only the poor income earner has to pay income tax while the minister of finance and the deputy finance minister, for instance, don't pay any taxes," Kotelawala said.

The Ceylinco group is the biggest private insurance company in Sri Lanka and is involved in a range of other activities including banking, finance, leasing and real estate. Kotelawala was two years ago involved in a pioneering effort by the country's business community to bring the two main political parties - the ruling People's Alliance and the opposition United National Party (UNP) - to the negotiating table to find a solution to the ethnic conflict.

That effort floundered due to the conflicts between the two parties.

Kotelawala said his new movement, already with 15,000 members and aiming for a million, was planning to hold peace talks with Tamil rebels in the future. "We can no longer watch helplessly while our political leaders stumble," he said.

SOLO-U, according to a statement, is a non-violent society dedicated to promote peace, economic prosperity and social development in Sri Lanka through a dialogue and joint action of citizens of Sri Lanka wherever they are and whatever religion, ethnic group or caste they belong to.

The group, Kotelawala noted, would also join a "human chain" protest across the island organised by the Association of Licensed Foreign Agencies (ALFEA) on September 5 from 10.30 am to 11 am.

ALFEA, which finds jobs mainly for Middle East-bound Sri Lankan workers, last week appealed to all Sri Lankans to stop work, and those who are travelling to stop their journeys and "form a human chain by linking hands on September 5" in a show of protest over the country's crisis.

Last month's Tamil rebel attacks at the international airport and neighbouring airbase, and blasting of planes including those owned by SriLankan Airlines has torn apart the economy hurting tourism in particular.

While insurance premiums to land at the airport were jacked up as the security threat increased, ships calling at the Colombo Port were also asked to pay a high surcharge because of the perceived threat. These rates have since then come down but tourist arrivals have been reduced to a trickle.

"We will be non-violent but not be passive. We will address ourselves to bring peace and economic prosperity to Sri Lanka," Kotelawala said.

Mind your business

Eternal hopelessness

One corporate investor quite reputed for speculative buying snapped up many stocks at the Colombo bourse, anticipating a two-party government that would have triggered a bull run.

Other prominent people said they would be heading the major state banks, once the greens took charge of the purse strings. Ah, hope springs eternal.

Flightless birds

Even the absence of other airlines - which have pulled out of Colombo for obvious reasons - and cut-price tickets have done little to boost prospects, executives say.

Desperate situations need desperate solutions, they say, so some drastic steps are on the cards: more retrenchment of staff, pruning flights and who knows, selling some of the remaining few birds which were untouched by the recent attack.

Redress for success

Most of them now subsidise their power supplies with generators but to do so on a greater scale would raise production costs in a highly competitive market, making the industry unprofitable, factory bosses say.

They have asked for redress from those who have the power and energy but the replies have been far from encouraging and some factory owners are in fact contemplating cutting down production.

Stockmarket Report

By Ashwin Hemmanthagama

On Monday due to heavy foreign involvement, the turnover rose to Rs. 104 million with 4.1 million shares of NDB being disposed at Rs. 25.50.

The following day, the turnover again rose to Rs. 119 million with the Sri Lanka Insurance Corporation raising its stake in DFCC to 11% through the purchase of 1.8 million shares. F & N Coca Cola meanwhile continued its hunt for more shares in the former Pure Beverages firm.

Perhaps the biggest deal was Harry Jayawardene, through the Distilleries Corp, enhancing his controlling stake by 2.5 percent to become the 9th largest shareholder of John Keells Holdings. This resulted in turnover soaring to Rs. 124 million on Wednesday.

Thursday's market was boosted with the local buying interest centered around Ceylon Cold Stores which traded 300,000 shares. 

New accounting standard for intangibles

By Dinali Goonewardene

"The council is expected to approve the new standard in September and if adopted, will be gazetted in early 2002," Reyaz Mihular, chairman of the ICASL Accounting Standards Committee and a former institute president told The Sunday Times Business Desk.

The standard is expected to become effective for financial statements commencing on or after 2002, he said. Examples of intangible assets include brands, goodwill and development expenditure. The new standard identifies non-monetary assets without physical substance held for use in the production or supply of goods or services or for rental to others as intangible assets.

The standard requires an enterprise to recognise an intangible asset at cost if future economic benefits from the asset are to derived and the cost of the asset can be measured reliably. Although the requirement applies regardless of whether the intangible asset is acquired externally or generated internally the standard prohibits the recognition of internally generated goodwill, brands and mastheads.

Although this appears to leave a considerable void, Mihular defends this decision, taken initially by the International Accounting Standards Committee, when preparing the International Accounting Standard (IAS) 38 on intangibles, as a means to prevent the inflation of assets.

If the intangible asset does not fall within the criteria specified by the standard, expenditure incurred should be written off as an expense. "The standard will bring discipline to balance sheets. Expenditure on advertising campaigns, pre-incorporation expenses and other fictitious assets and liabilities will disappear," Mihular said. The standard requires an intangible asset to be amortised over its useful life which should not exceed twenty years.

Although Sri Lankan accounting standards are based on international accounting standards, they are adopted to suit local requirements. Standard setting involves a review process which involves the appointment of a steering committee for each standard and the distribution of the standard to user groups. A council of the Institute of Chartered Accountants is responsible for adopting and publishing the standard in the government gazette. The entire process spans six to twelve months.

Paradise lost and tears for SriLankan Airlines employees

30th July dawned in the lives of some 500 employees of SriLankan Airlines Ltd like any other busy Monday. At least that is what they expected this Monday to be. Little did they realise as they stepped out of their homes that this fateful Monday would be different from all the Mondays they had known; that it would be the last Monday they would be working for SriLankan Airlines.

These employees had agreed to a Voluntary Severance Scheme (VSS) on the understanding that they would be contributing towards the airline's development until 31 December 2001 but none expected their last working day to be 31 July.

Loyal Service

There were many among those employees whose service to Air Lanka and SriLankan Airlines spanned a good 22 years. Employees who joined the company in their teens and shared its joys and sorrows, good times and bad, and gave out their best to the airline, broke down and cried when they were told that they had just one more working day.

Some who were on leave could not believe their ears when colleagues called and told them that their last working day was the following day. Yet others who were cabin crew - away on flights - learnt that they were no longer employees of the company when they returned home a few days later.

It was not the loss of pay for five months that made those loyal employees whose dedication turned the ailing airline round in troubled times, sad. It was the insensitive way they were treated after all those years of commitment and hard work.

The Dubai-based Emirates-led management decided that all those agreed to the VSS must go by 31st July and the local management bowed down in callous disregard to people's feelings.

Weak HR

The HR division should have explained to the Emirates management and convinced them that the culture of Sri Lanka was totally different to that of the Middle East where people are employed on a contract basis with the employer's right to annul the contract without prior notice.

Thanks to HR, some 500 employees had less that 24 hours notice to pack their bags and get out of their second home. Again thanks to HR most people were served with their letters of termination at least a day after they were expected to stop working! Such people had to waste their time on August 1st to collect letters dated 31st July, though they had ceased to be employees by this time. The HR division, with all its modern IT resources found it impossible to deliver 500 letters of termination within two days. If it was impracticable to deliver 500 letters of termination within two days, the division should have informed the management that they needed a certain amount of time to handle it professionally.

Shock waves

Shock waves swept through the establishment as word started spreading on Monday 30th July that 711 applicants to the VSS were to leave the next day. Some of the affected included those who risked their lives on July 24th when the Katunayake Air Force base and the airport were attacked by a handful of LTTE cadres. They had to go with not so much as a word of thanks from senior management.

The just concluded VSS exercise has left many people high and dry, especially in terms of loan repayments. Some people who would have completed five years of service between August and December were denied the right to the gratuity payment which otherwise would have been theirs if the company honoured its previous commitments. 

All those 500 employees who went home on 31st July have been denied five months' pay, EPF and ETF contributions plus other fringe benefits such as concessional tickets. Yet others who thought of finding jobs within the 6-month grace period suddenly found themselves out of jobs. Some of those breadwinners would have had no explanation to give their wives and children.

– Ex-employee

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