Removal of SLT chief raises more questions than answers
In a move towards accomplishing state economic policy reforms and for the proper corporate governance of the majority Treasury-owned Sri Lanka Telecom (SLT), its chairman Rohan Fernando has been removed by a board resolution approved on Thursday, informed official sources said.
But Mr Fernando told a hurriedly arranged media conference in Colombo later on Thursday that he was removed as SLT Chairman in a ‘boardroom coup’.
However the appointment of a new SLT chairman replacing Rohan Fernando was mooted in February this year following, at that time, the Treasury’s nomination of Reyaz Mihular, as an Independent non-executive director of the SLT board of directors. The latter has now been appointed the new chairman.
The February new appointment had changed the composition of the SLT board to four from Global Telecommunications Holdings (GTH) NV (linked to Malaysia telecom firm Maxis) 44. 98 per cent stake holder of the company and six from the 49.50 percent issued share capital owner the Treasury.
The previous composition was four directors from GTH and five from the Treasury, a top SLT official who wished to remain anonymous told the Business Times that the removal of the chairman was not surprising as he was not flexible in taking decisions.
GTH directors and a prominent SLT director were not in favour with the conduct of Mr. Fernando in handling company affairs and the government was dissatisfied with his attitude in the implementation of SLT reforms recently, he added. They were behind the scenes manoeuvering to oust the chairman who was against the government’s plan to divest majority shares of the SLT, he said.
The removal of SLT chairman will raise more questions of his performance than answers as the issues surrounding the state of affairs of the state-owned entity were very controversial, he pointed out.
According to SLT”s Articles of Association, “The Directors may appoint and remove the Chairman of the Board at their respective meetings and may determine the period for which he is to hold office. The Chairman so appointed shall preside as Chairman at meetings of the Directors”.
It further stipulates that the composition of the SLT board should be five from majority shareholder and four from the second highest share holder. And this was changed to six by the Treasury.
The appointments and the composition of the Board are made through the Secretary of the Finance Ministry.
The ministry will issue a notification approving the SLT board decision soon, a senior Treasury official said adding that it may get delayed as the President who is the finance minister is overseas.
Sri Lanka Telecom PLC is in the midst of a proposed sale of shares and privatisation efforts. Mr. Fernando was not supportive of this move saying the SLT is performing well financially.
SLT was among several institutions that were brought under the purview of the Ministry of Finance, Economic Stabilisation and National Policies via a Gazette notification in May this year.
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