Transparency and Accountability

Maxis, the leader in mobile communications in Malaysia which was involved in the ‘hot … hot’ deal to buy a stake in Sri Lanka Telecom (SLT), last week flew a group of senior editors and reporters to Kuala Lumpur. The purpose? To provide them with a complete briefing, overview and understanding of Maxis and its subsidiaries under the Ananda Krishnan-led conglomerate Usaha Tegas Berhad (UT) Group. Maxis has purchased a 40 percent stake in SLT which includes the 35 percent owned by Japan’s NTT and is now preparing to run this lucractive cash cow.

The briefings were thorough and the ‘hospitality’ excellent for the group of visiting journalists which included a representative from The Sunday Times FT but officials failed to come up with a proper explanation about the role of Global Telecommunications Holdings (GTH), the company that purchased the stake on behalf of Maxis.

The offer to buy the NTT stake by Maxis through GTH, a company incorporated in the Netherlands and used as an investment vehicle by the UT Group, was initially blocked by a fundamental rights petition filed last year by the late Sripathi Sooriyaarachchi, a former minister, claiming fraud and corruption in the deal.

However after submissions by both sides, the Supreme Court gave the go ahead to purchase the SLT stake but directed that it should be done in a transparent manner. Yes, the final transaction came via public announcement and there were statements subsequently from both SLT and GTH. However many of the questions that we ourselves have raised in this newspaper over and over again are yet to be answered. Is this the transparency envisaged by the court which was acting in the public interest?

On the other hand, GTH, the owner of the 40 percent-plus stake in SLT, was nowhere to be seen during the tour of the Maxis and UT facilities by the group of visiting journalists. When asked about the deal and its secrecy, Maxis officials said those questions should be asked from GTH.

Now, as our report says, the whole intention of the visit to the Malaysian offices of Maxis and UT subidiaries – as we see it -- was to counter the negative publicity that Maxis attracted in the past several month while the ‘deal-making’ by the ‘deal-makers’ was in the works.

Some of the questions we and the public asked in the past until the time the transaction was concluded were -- Are there any irregularities in the deal, were there any commissions paid to a ‘middle man’ to secure the deal or did a top official fly to Tokyo ostensibly on a peace mission but essentially to persuade NTT to sell the stake to Maxis?

Following media exposure over the proposed deal, the government appointed a committee to examine the offer and among other things, to examine the shareholders agreement between the Treasury (which holds the government’s 51 percent SLT stake). We are yet to see that report and its findings.

Many other questions still remain unanswered. Why are there delays in the formation of a new board at SLT, more than seven weeks after the transaction was publicly announced? Maxis representatives in Kualu Lumpur were unable to answer this for obvious reasons – its GTH that must decide on the nominees.

Both SLT and Maxis have remained silent during the negotiation process and were not available for clarification by the media. Even after the transaction was concluded, top officials of the UT group including Maxis’ communications officers who were in Colombo chose to avoid the media even though their local communications specialist was aware that newspapers like The Sunday Times have made repeated requests for comments from Maxis on the issue.

When asked why Maxis officials avoided the media while in Colombo, the response was that it was company policy not to comment on issues that are under litigation (in court). But what about after – when the deal was done?

Officials from Maxis were quite open and frank in speaking about the future of the SLT-Maxis joint venture but didn’t discuss the transaction and the issues surrounding it, which is what the public would like to know.

With governance and transparency being the buzz words, corporates across the world are not only making sure that their transactions are in the public domain but are voluntarily coming out with more information than is deemed necessary. There are many examples of this amongst socially responsible companies.

Some local officials, looking after the Maxis brief, frowned on the ‘bad press’ that Maxis got while the negotiations were on to purchase the SLT stake. “It’s all rubbish (all those allegations),” one said but when persuaded to be quoted in the media, quickly backed down.

It is still not too late to clear the air: Were there pay-offs in the SLT deal? Can the media have access to the agreement? We can provide a detailed set of questions if GTH or Maxis are up to it to respond.