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Cold
shoulder for customers 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! ETF
takes workers for a ride 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. Are
banks accountable to their shareholders? 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. |
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