Cold shoulder for customers
My son purchased a National refrigerator from Royale Electronics (Pvt) Ltd at the Duty Free Shop at Katunayake airport on May 9,2001 for US$ 420. At home on opening the box containing the item, we found the instructions on the leaflet were in a language not known to us. All indications on the body and inside the refrigerator too were in an unknown language. There were clear instructions outside the box in English warning us not to connect or operate it without following the instructions enclosed inside.

On June 19, 2001 I called over at their head office and service centre at Sea Street, Colombo, and asked for an English version of the instructions and the services of a technician to have the refrigerator correctly installed. They promised to attend to it immediately. Thereafter despite telephone calls and registered letters, no English version of the instruction leaflet was sent to me.

I took up this matter with the Commissioner of Internal Trade in July 2001 who has written several letters to this trader asking him to comply with my request at once. There was no response. I again wrote to the Commissioner on 30.3.2002. But sad to say, I remain where I was. How can a business be so callous!
V.K. Wijeratna

ETF takes workers for a ride
Trade unions and subscribers have vehemently protested against a Employees' Trust Fund decision to levy a special fee to expedite the release of funds to its members.

The fund, started in 1981, has said members could withdraw their funds within two days if they pay Rs. 1,000. The new chairman Dinesh Weerak-kody, had taken the decision even without appointing the new board of directors.

Several members said this was unacceptable because there was no point in paying money to withdraw one's own money earned with sweat and toil over a period of years.

The management had said the new scheme would come into effect from May 1.
"It is an insult to the working class to charge a fee to release members' hard earned money. This is like extortion, demanding money from members of the ETF to release their own funds," said a private sector manager. "The board, if there is any, should withdraw this decision," he said, adding that if not, the working class would not tolerate it. "It is up to the Prime Minister and the Labour Minister to intervene and prevent this LTTE-type extortion by the government," said another private sector employee.
(Courtesy: ColomboPage website)

Are banks accountable to their shareholders?
Newspapers have been giving wide publicity in recent weeks to the accounts and balance sheets of banks and other financial institutions. With a few exceptions, most banks have not done too well this year and their plight is understandable going by the many problems the Sri Lankan economy faced in 2001. These ranged from the terrorist attack on the airport, disturbances created by the elections, the September 11 attack in New York and many more calamities.

Banks have attributed their poor performance and low dividends to these setbacks. Having said that, if one were to look at the accounts of all these banks comparatively, reasons other than the mere downturn in the economy could be seen. Reading between the lines and the small print of some of these annual reports one sees mismanagement, ill advised investments and also loans made to connected companies which have subsequently been written off, as the major reason for low profitability - not merely the poor macro position. An annual report of a well known bank shows massive provisions running into nearly Rs. 700 million, half of it on behalf of parties having a direct interest in the bank, which must be a gross violation of the banking laws. It is surprising how the Central Bank remains silent on this type of violation.

Another major reason given for the poor performance is the investment in a head office building, which was originally estimated to cost Rs. 4 billion but has now shot up to Rs. 6 billion. A 50% cost escalation, to say the least, is totally unacceptable. When building estimates are made, a 15-20% provision is always left for cost escalation. On top of that to add another Rs. 2 billion of depositors' and shareholders' money is something which should never have been done without consulting all shareholders.

This type of mega building projects should not be undertaken by banks at a time when banks world wide are moving away from owning high rise structures to renting low cost premises.

The argument being, banks are not in the business of property development but in banking. With the first signs of a recession in 2000, many international banks sold their buildings but remained as tenants. The directors' statement in this annual report devotes almost five pages to the facilities and finishes of the building which does not mean anything to the shareholder but a reduced dividend. I hope the directors would agree to set up a special shareholder committee to ascertain whether the ordinary shareholders' interests have been protected in carrying out this mega project.
V. Sriharan

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