News
|
||||
SLT
draws debt fresco on Sigiri card The debt amounts to over a quarter of the slice of its entire profits boasted by SLT in its quarterly results made public two months ago. Directors of the UK-based company Premier Communications International Limited (PCI), Rajasunderam (Sam) Seithan and Balasuncham (Bob) Sangaran were recently in Colombo to negotiate with the new management of SLT after the debt was kept hush-hush for several months now. Sigiri Card was a joint partnership between SLT and PCI to promote cheap calls to Sri Lanka in a highly competitive calling card market from Britain. This venture was very unlikely to succeed from its inception due to the aggressive pricing policy in the market place. PCI was offered discounted rates of US cents 7.25 against its rivals who were getting them at US cents 11.25. PCI has got 10 million minutes of call-time per month on offer, which gives it a reduction of US $ 400,000 per month. The discounted-rates, however, do not provide PCI a profit, and according to SLT sources the debt is now nearing US $ 9 million ( Rs. 900 million ). SLT will have to bear 51 per cent of the loss. According to a reputed credit rating agency, PCI has been given a poor credit rating. The financial strength of the company has been given as ‘negative', and the risk factor as ‘significant level of risk'. The UK-based company offers subscribers, mainly Sri Lankans in the UK and Europe, to call very cheaply. PCI uses a complex web of overseas companies with nominee shareholders to avoid paying UK VAT. Most UK subscribers receive their bills from a company outside the UK, in Medira. The issue SLT is investigating right now is who authorised credit for PCI almost two years ago when the operations began under these conditions, and whether SLT knew it could receive a profitable return on the joint venture for the company and who monitored the increase in monies due to SLT from PCI. SLT sources confirmed that they were concerned as to whether PCI could repay the debt, as the latest published accounts show that it is an almost insolvent company. All suppliers have been warned to seek guarantees before extending credit. According to SLT sources, the company has now discovered that while some telephone companies had to submit a deposit before they made a bid for the Sigiri joint venture partnership agreement, PCI did not even make a deposit at the time of the bid. Sigiri Card made a major promotional campaign in Sri Lanka when SLT sponsored the Australian cricket tour to Sri Lanka, its directors making appearances on the dais during presentation ceremonies. In the UK, the company also plays a high profile role. Recently its directors were invited as chief guests for a fund-raiser of the Sri Lanka High Commission under the patronage of outgoing High Commissioner Faiz Mustapha PC. |
||||
Copyright © 2001 Wijeya Newspapers
Ltd. All rights reserved. |
