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Enjoining
order stops SLT disconection with PCI The SLT is in the midst of its efforts to recover Rs 800 million in arrears owed by PCI for telephone calls from UK using the 'Sigiri' card. In a statement of objections filed on December 8, the SLT lawyers said the enjoining order compels SLT to continue providing services worth about Rs 90 million a month on unsecured credit terms to PCI which had already defaulted on payments. The SLT said its losses were mounting and would continue to mount unless the enjoining order was discharged. It said PCI was a company that had "a financial strength which is negative" and which "represent(s) significant levels of risk", according to financial analysts Dunn and Bradstreet. "Accordingly, the prospect of the defendant (SLT) eventually recovering the total monies due and payable by the plaintiff (PCI) is clearly remote" the SLT said in its objections. It said PCI was trying to prevent the SLT from terminating its agreement and was trying to get the SLT to continue providing its services even though PCI had not paid its arrears. PCI had asked for more time to pay up and the dispute had also been referred for arbitration. The case was on November 24 preventing SLT from terminating the agreement until arbitration was over. Both parties are to file written submissions on Tuesday, December 14, on the plaintiff's application for interim injunctions. SLT Chairman Anil Obeysekara told The Sunday Times that they were continuing to provide Rs. 90 million (US$ 900,000) per month on unsecured credit terms to PCI which was already in debt, having been ascertained by Dunn and Bradstreet -- a reputed international financial analysts firm -- as having a negative financial strength and representing significant levels of risk. Mr. Obeysekara said that from August this year, there had been many discussions with the Directors of PCI to recover the debts and under the initial addendum, PCI agreed to pay the outstanding amount in instalments over a twelve month period, ending in September 2005. He said in addition PCI also agreed to furnish a bank guarantee for US$ 5 million to SLT by the end of September, which would remain in force until the full arrears is settled. Mr. Obeysekara said the PCI also agreed to furnish an irrevocable Bank Guarantee for US$ 3 million to SLT by the end of September. Meanwhile PCI had paid off the arrears due for the months of January, February and July (paid in three instalments) this year. Although many reminders were sent, the PCI failed to keep to their end of the agreement and over the next three months PCI kept postponing repayments and proposing various repayment schemes but it never managed to fulfil them, Mr. Obeyesekera said and added that the PCI had also requested that SLT not terminate its original agreement as then the PCI would be unable to repay their debt in full. He said the initial agreement and many of the Amendments made thereafter, had many loop-holes and wasn't thought out very well adding that among them were provisions enabling a three-month credit allowance to pay off bills and the termination agreements. Mr. Obeysekera said that in all probability, billing for the first half of the year would have been delayed (for both local and international clientele alike), due to the transfer from the old billing system to the new. However, the SLT was sending out estimated bills for this period, so PCI should have had a definite idea on what their payments would have been, said Mr. Obeyesekera. He said that the discount rate of 7.25 cents, was fixed by the CEO and had been in operation only from June this year, on the basis that it was a joint venture with SLT. "We are hoping to recover all the outstanding payments and are quite adamant not to let them off the hook" the SLT Chairman said determinedly. Meanwhile former SLT Chairman had written to the Secretary to the Treasury P.B. Jayasundara calling for an inquiry to ascertain as to how an outstanding amout stated as Rs. 42 million from the Sigiri Card at end of August 2004 had shot up to over Rs. 800 million at the end of September 2004. |
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