NTT-Maxis on hold till September

After a Supreme Court decision last week barred any further action on the proposed purchase of Sri Lanka Telecom (SLT) shares by Malaysian company Maxis Communications, the Court will only hear the case again on 17 September 2007.

This means that no new developments will take place for at least three months or perhaps even longer, telecom industry analysts said.

Sacked Sri Lankan Minister Sripathi Sooriyarachchi made headline news when he recently filed the fundamental rights petition in the Supreme Court alleging massive corruption over the highly controversial sale of SLT shares to Global Telecom Holdings (GTH), the parent company of Malaysia's Maxis Communications. Speaking to The Sunday Times FT this past week, the former minister expressed confidence in the eventual outcome of the case. "In my personal opinion, we can win because of the way we have presented it in court."

Japan's Nippon Telegraph and Telephone Corporation (NTT) still holds a 35.2% stake in SLT of which 25.3% were to be sold to Maxis before the Supreme Court issued a stay order on any action regarding the deal last week, a victory for Sooriyarachchi. The Sri Lankan government still retains the majority 49.5% of the SLT shares with the remainder being held by the public.

Sooriyarachchi, who handled PERC explained that there were around five or six interested parties for the purchase of the SLT shares from Singapore (Singtel), Australia, Dubai Tel, Indonesia's Telkomsel and John Keells Holdings. However, he maintains the offer from Maxis had been unsolicited.

Written communication came to the Ministry from Dubai, Telkomsel and John Keells while the other interested parties made certain inquiries. "I discouraged that because if there was anything, the Ministry would have called for proposals. I do not accept any unsolicited offers."

"Dubai Tel submitted an expression of interested through one of their local agents but John Keells and some other parties had called Nippon Telegraph and Telephone Corporation (NTT) directly so we were not a party in this matter," Sooriyarachchi said. He explained that the Ministry did not want to obstruct any communication between NTT and interested parties but would have only become involved in matters regarding the management of SLT. "Therefore, most of the people dealt directly with NTT."

Sooriyarachchi further added that Maxis had reached an agreement with NTT on the purchase of the shares after he was sacked from his portfolio but prior to filing action at the Supreme Court.