Deputy Minister of Digital Economy, Eranga Weeraratne, says Sri Lanka Telecom (SLT) – Mobitel has recorded a profit of over Rs. 6.5 billion last year. 

Addressing the media, he said the institute has been converted into a profit-making entity following a change in management and leadership. 

“SLT-Mobitel was considered a loss-making entity and was facing the threat of being sold. However, it has made a turnaround as a profit-making entity within a year,” he said. 

Deputy Minister Eranga Weeraratne added that the government intends to further develop the state entity. (Newswire)

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Sri Lanka Telecom PLC has appointed Dr. Mothilal de Silva as an Independent, non-executive Director and Chairman of its Board.

The appointment is effective from today, 04 November 2024.

Dr Mothilal de Silva is a multidisciplinary C-level executive in the telecommunication industry having experience in Sri Lanka and multiple countries in the Asia and Pacific regions.  

He is known for turning around Fiji’s state-owned telecommunication company, Telecom Fiji Ltd sustainably after 5+ consecutive loss-making years, during his tenure as Group Chief Executive Officer.

Dr Mothilal de Silva also served as the Group Chief Strategy Officer and Group Chief Corporate Officer of Dialog Axiata and Vice President of Process Excellence and Group Operations of Axiata Group Malaysia. (Newswire)

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The Court of Appeal has issued an injunction order against the measures taken concerning the divestiture of the Sri Lankan Government’s shares in Sri Lanka Telecom PLC and Lanka Hospitals Corporation PLC.

The injunction order, preventing future measures in this regard, is effective until March 12, 2024. 

Court of Appeal Justice D.N. Samarakoon issued the order after taking up for consideration the writ petitions that had been filed against the divestiture of the Sri Lankan Government’s shares in Sri Lanka Telecom PLC and Lanka Hospitals Corporation PLC.

Three Petitions were filed for Sri Lanka Telecom PLC including by Lyca Mobiles, and S.M.R. M company, while two petitions were filed for Lanka Hospitals Corporation PLC including by Lyca Leasing Holdings.

The petitioners had informed the court that they had submitted bids per the required criteria for the divestiture of the Sri Lankan Government’s shares of 50.23% in Sri Lanka Telecom PLC and 51.34% in Lanka Hospitals Corporation PLC.

The petitioners alleged that, however, the Cabinet of Ministers had rejected the bids without providing any clear explanations, adding that the decision was against the law.

Taking into consideration the facts presented by the petitioners, the Court of Appeal issued an injunction order preventing further measures concerning the divestiture of the Sri Lankan Government’s shares in Sri Lanka Telecom PLC and Lanka Hospitals Corporation PLC. (NewsWire)

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Two international companies have pre-qualified as bidders for the divestiture of the Sri Lankan Government’s shares in Sri Lanka Telecom PLC. 

According to the State-Owned Enterprises Restructuring Unit of the Ministry of Finance, the two companies are Jio Platforms Ltd, Gujrat, India and Gortune International Investment Holding Ltd c/o Capital Alliance Limited.

The State-Owned Enterprises Restructuring Unit said in a statement that the Government acting through the Ministry of Finance called for a Request for Qualification (RFQ) from potential investors for the divestiture of its shares in Sri Lanka Telecom PLC. The deadline for submission of proposals ended at 02.00 pm on Friday, 12th January 2024.

The Request for Quotes (RFQ) received was thereafter, evaluated based on the Special Guidelines on Divestiture of State-Owned Enterprises approved by the Cabinet in July 2023.

Accordingly, the Cabinet Appointed Special Project Committee (SPCC) and the Special Cabinet Appointed Negotiating Committee (SpCANC) have pre-qualified two bidders for the Request for Proposal (RFP) stage.

Among the selected pre-qualified bidders, Jio, part of Mukesh Ambani’s Reliance Group, is a strong contender, valued at $107 billion by brokerage BofA, while Gortune International Investment Holding is a private equity firm out of China’s southern hub – Guangdong province.

Meanwhile, Pettigo Comercio International LDA c/o NDB Investment Bank Ltd, a front for UK’s Lyca Group owned by Lankan-born entrepreneur Allirajah Subaskaran, has failed to qualify as a bidder. 

The Sri Lankan Government’s sale of a 50.23% stake in Sri Lanka Telecom has drawn interest from the Indian and Chinese firms.

The International Finance Corporation acts as Transaction Advisor for the divestiture of shares held by the Sri Lankan government in Sri Lanka Telecom PLC. (NewsWire)

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The Board of Directors (“Board”) of Sri Lanka Telecom PLC (“SLT”) refer to the recent media coverage of Boardroom changes at SLT.

This note is to provide factual information and clarity on the corporate identity of SLT, the role, responsibilities, authority and accountability of management and the Board (including the Chairman of the Board), and in particular the separation of powers between the Board and Management. All of the information in this note is already available in public sources.

SLT was incorporated under the then Companies Act No. 17 of 1982 (now superseded by the Companies Act No.7 of 2007).  SLT is listed and quoted on the Colombo Stock Exchange (“CSE”) and is governed via the tenets of SLT’s Articles of Association (“Articles of Association”). The Government of Sri Lanka and Global Telecommunications Holdings (“GTH”) have a 49.5% and 44.98% equity interest in SLT. SLT has about 13700 other shareholders. As disclosed in the Annual Report, GTH is wholly owned by Usaha Tegas Sdn Bhd, which is incorporated in Malaysia. SLT is therefore not a state-owned corporation nor a government organization as opposed to government corporations established under separate enactments. 

As a listed company, SLT complies with the CSE Continuing Obligations and the Code of Best Practice on Corporate Governance (“CG Code”).  A copy of the Articles of Association is available for review at its registered office and the websites of SLT and CSE. 

The Board plays a stewardship role in accordance with the CG Code which provides details on the role, responsibilities and authority of the Board and Management.

The Board, including the Chairman, is non-executive.  This means that no director, including the Chairman of the Board, has the authority to make individual decisions or give individual instructions to members of management or staff.  Board decisions and instructions are made and conveyed by formal, minutes and collective Board decisions.

The position of the Chairman at SLT is not to be confused with that of Executive Chairman in other public companies or State-Owned Corporations. The Chairman of the SLT Board has the primary role to chair board meetings and facilitate and ensure the workings of the Board. The Chairman is appointed by the Board in accordance with the Articles of Association.

All Directors, including the Chairman are non-Executive and are not employees of SLT. Their role is not full time. They are therefore not entitled to a salary nor benefits that accrue to employees.  All Directors in SLT, including the Chairman, do receive fees for the discharge of their fiduciary duties. 

SLT is led by a Chief Executive Officer (“CEO”) who is appointed by the Board.  It is the CEO and the management team that operate the business and make the executive decisions within the powers provided to them by the Articles of Association. The CEO is an employee and is paid a salary.

The separation of powers, that the Board undertakes the oversight role and the management the executive role, ensures clear delineation of roles, responsibilities, authority and most importantly, accountability.

Compliance with related party transactions and its related disclosures in accordance with Sri Lanka Financial Reporting Standards 24 are monitored by the Related Party Transactions (“RPT”) Committee of the Board.  The Board wishes to confirm that the present Chairman has not only disclosed his related party interests but that he has in fact made disclosures over and above regulatory requirements.  The Board has robust controls in place to ensure that if a director does not disclose related party interests or interferes in areas where there is conflict, the Board will take the necessary action in accordance with the law and regulations.

The Board does hope that this statement provides clarity for the informed stakeholder. We humbly request that aggrieved and interested parties that have concerns regarding the governance of SLT address the appropriate forum of the regulatory authorities or the courts of law. The Board will not want to enter into the bowels of public debate and correct each and every uninformed, misguided, erroneous or unwarranted statement.

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The Technology Professionals of Sri Lanka (TPSL) have spoken out in support of former Sri Lanka Telecom (SLT) Chairman Rohan Fernando, following his recent removal from his post.

The TPSL alleged that Fernando’s successor, the new Chairman of SLT failed to acknowledge certain important facts during Rohan Fernando’s tenure as Chairman of SLT.

According to the TPSL, Rohan Fernando had not drawn a salary during his tenure as the Chairman of Sri Lanka Telecom.

In a statement on Facebook, the TPSL also revealed that the vehicle provided to Rohan Fernando during his tenure at the SLT had followed the proper procurement procedures and was obtained with the approval of the Board.

Upon his election as Chairman, Fernando was provided with an ageing V8 vehicle which was nearly 08 years old and had run nearly 300,000 kilometres. The sale of the V8 generated Rs. 35 million and the outflow for the new vehicle was only Rs. 36 million, the TPSL clarified. 

Pointing out that  Fernando was entitled to a car and a spare vehicle, the TPSL stated that he only used one vehicle despite his work requiring extensive travel. (NewsWire)

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Newly appointed Sri Lanka Telecom (SLT) Chairman Reyaz Mihular has listed seven new management strategies and future administrative initiatives by the Sri Lanka Telecom-Mobitel Board. 

According to Daily FT, in a memo to the employees of the SLT- Mobitel Group, Mihular has outlined the desired way forward for the institution. 

In his message to the staff, Mihular stressed that he is a Non-Executive Chairman and his role is to fully comply with the Company’s rules as stated in the Articles of the Company. 

The seven new management strategies and administrative initiatives listed by the Board are as follows;

1. Management of the SLT-Mobitel will rest in the hands of the Chief Executive Officer, Janaka Abeysinghe and his management team and neither me nor my fellow directors will get involved in any manner in the operational activities of SLT-Mobitel.
   
   2. As a Board, we will set out a strategy that is aligned with the vision, mission and purpose; targets and KPIs (Key Performance Indicators) for the management team, checks and balances and their performance will be closely monitored and measured against them and suitably rewarded, where relevant. The key is that the Board wishes to foster a performance culture with measurable outcomes.
   
   3. Urgent steps will be taken by management to sell the Range Rover, which cost nearly Rs. 71 million in February 2021 in a transparent process to get the best value to the Company. Whenever the Chairman and/or Directors need to attend official meetings/functions, a company vehicle will be provided on a need basis.
   
   4. The present Chairman’s office will be converted into a Directors’ meeting room.
   
   5. There will be just one (1) Secretary (as opposed to the 6 staff members presently assigned to the Chairman) to deal with all incoming communication to the Chairman’s office and other Directors. The administration matters for all directors will be handled by Mahesh Athukorala, Company Secretary.
   
   6. There will be no security necessary for the Chairman
   
   7. I will, like other directors, not be involved in any communication, receipt of information or decisions where there are interests involving me and/or my family that have transactions with SLT-Mobitel. I have declared my directorships as required by the regulatory requirements of the country and this has been confirmed by the Company Secretary. (NewsWire)

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Former Sri Lanka Telecom (SLT) Chairman Rohan Fernando alleged that the intention to sell shares of Sri Lanka Telecom PLC to a foreign investor resulted in his removal as the Chairman of the state-owned institution.

Speaking during a special media briefing held today, Fernando stated that Malaysian investors were interested in purchasing SLT and had requested his removal.

Fernando accused the SLT Board of carrying out a coup to remove him from the post of Chairman in line with the requests made by the said Malaysian investors.

He pointed out that it was customary for appointments to the SLT Board to generally be made by the Secretary to the Treasury.

Claiming that however, at today’s SLT Board meeting the members were in a hurry to conduct a vote to elect a new Chairman, he said the vote was not included on the listing of the day’s agenda.

“I will seek legal advice on my removal as I believe the proper procedure was not followed. I will also seek clarification from the Treasury Secretary on the matter,” Fernando added.

Rohan Fernando was appointed as Director/Chairman of the Company in January 2020.

Fernando was replaced by Reyaz Mihular, who formerly served as a member of the Sri Lanka Telecom PLC Board. (NewsWire)

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Reyaz Mihular, a member of the Sri Lanka Telecom PLC Board, has been appointed as the new Chairman of the state-owned institution. 

The appointment was made during a meeting of the SLT Board of Directors held today.

Reyaz Mihular served as the Managing Partner of KPMG Sri Lanka & Maldives from April 1, 2012, to March 31, 2022. He was the Chairman of KPMG’s Middle East & South Asia (MESA) Regional Cluster during the period 1st October 2018 to 30th September 2021. 

However, earlier today, former SLT Chairman Rohan Fernando alleged that the Board of Directors had removed him from the post of Chairman of SLT.

Rohan Fernando was appointed as Director/Chairman of the Company in January 2020.

Sri Lanka Telecom PLC is in the midst of a proposed sale of shares and privatization attempts.

SLT was among several institutions that were brought under the purview of the Ministry of Finance, Economic Stabilisation & National Policies via a Gazette notification in May. 

The Secretary to the Treasury also gave an undertaking to the Supreme Court of Sri Lanka in May pertaining to the divestiture of government-owned shares of Sri Lanka Telecom.

The Treasury holds a 49.50% stake in the issued share capital of Sri Lanka Telecom PLC. (NewsWire)

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Former Director General of the Telecommunications Regulatory Commission (TRC) Professor Rohan Samarajeeva says privatization of the telecom industry does not pose a threat to national security.

According to the President’s Media Division (PMD), Prof. Samarajeeva expressed his opinion regarding the Sectorial Oversight Committee’s report on National Security while participating in the PMD’s ‘101 Katha’ programme.

During the programme, Prof. Samarajeeva stated that the report relies on assumptions and has turned “national security” into a mere slogan. He further said the report lacks a professional study and contradicts the standards set by the Sectorial Oversight Committee.

Expanding on the subject, Prof. Samarajeeva highlighted the main reasons behind his stance. He pointed out the ignorance of both the present and the past, emphasizing that during the 1990s, Sri Lanka invited numerous firms, including Sri Lanka Telecom, which, at that time, did not possess a mobile phone network. Despite Mobitel being owned by an Australian company, the management rights were retained by an Australian company, and Mobitel had a history of serving the government due to the telecom firm’s ownership. Additionally, the operations of Mobitel were overseen by Telstra Corporation, a Japanese business that was responsible for telecommunications, and the majority of decisions were made by Japanese CEOs, even though the chairman of Telecom was Sri Lankan.

Amid the conflict, Sri Lanka had four mobile phone providers and three fixed phone businesses, with Dialog being the only corporation with a Sri Lankan CEO, although it was fully owned by Malaysia. Prof. Samarajeeva said the repetition of the phrase “national security” without proper examination, suggested that it had become a mere mantra or slogan. 

He emphasized that when the government solely owned the telecom firm, all foreign calls were routed through the telecom headquarters in Colombo, and any harm to it would isolate Sri Lanka from the international community. Furthermore, he explained that even with cables and satellites, if the software system failed, the entire network would be disrupted, as there was no alternative system in place. He cited two bomb attacks by the LTTE that occurred on the same day to underscore the national security threat faced by the government-controlled telecom. Following privatization, Prof. Samarajeeva recommended that a Japanese corporation develop a backup system, which was promptly implemented, thanks to their investment.

Prof. Samarajeeva noted that a government agency could not have achieved what the Japanese firm did, as most government organizations do not prioritize infrastructure security due to limited funds. He suggested that privatization, with appropriate controls, allows for investment and urged authorities to consider their recommendations seriously.

As an example, he mentioned a case where Telecom and the Japanese corporation faced a one-million-dollar loss due to a mistake, but the customer was refunded. He also pointed out that during the 1990s, there was a monopoly on international calls, but now international connections are no longer solely dependent on telecom. He highlighted the use of Gmail for government communication and emphasized that the majority of government information is transmitted through the Gmail domain, which is foreign-owned. Additionally, politicians and government officials use WhatsApp, which is also owned by a foreign entity, to communicate.

Prof. Samarajeeva argued that privatization does not mean government data is being compromised since data centres in Sri Lanka, including those of the telecom company and Dialog, are rented to store government data. He used the analogy of renting a part of a safety deposit box in a bank, where the control lies with the individual who leases the safe, not the bank. Thus, only authorized personnel have access to government databases, and having a copy of the data stored outside Sri Lanka enhances security. 

He cautioned against the appointment of individuals with political connections to government institutions, as malpractice tends to occur in such cases. He stressed the importance of including knowledgeable individuals in Sectorial committees and encouraged other nations to adopt similar practices. 

According to the PMD, Prof. Samarajeeva expressed disappointment over the submission of the report to Parliament, suggesting that it was influenced by the ideas of the Sectorial committees rather than relying on expert opinions. (NewsWire)

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The Sectoral Oversight Committee on National Security says it will not recommend the privatization of Sri Lanka Telecom (SLT).

The Committee chaired by MP Sarath Weerasekara has stated it poses a threat to national security.

The Sectoral Oversight Committee on National Security further revealed that matters sensitive to national security could be exposed through this move. 

Sri Lanka Telecom was among several institutions that were brought under the purview of the Ministry of Finance, Economic Stabilisation & National Policies via a Gazette notification in May. 

The Secretary to the Treasury also gave an undertaking to the Supreme Court of Sri Lanka in May that the government-owned shares of Sri Lanka Telecom will not be divested before June 15, 2023.

The Treasury holds a 49.50% stake in the issued share capital of Sri Lanka Telecom PLC. (NewsWire)

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The government-owned shares of Sri Lanka Telecom (SLT) will not be divested before June 15, 2023, the Secretary to the Treasury said. 

The Treasury Secretary made the remarks while giving an undertaking to the Supreme Court of Sri Lanka today over the matter. 

The Treasury Secretary further stated that the ongoing process of divesting is being carried out through lawful means. 

The Treasury holds a 49.50% stake in the issued share capital of Sri Lanka Telecom PLC.

The matter has been taken to court after the Treasury Secretary had informed the Board of Directors of Sri Lanka Telecom PLC (SLT) that the Cabinet of Ministers granted approval in principle for the divestment of the stakes held by the Treasury Secretary in the company. (NewsWire)

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A tense situation was reported between the Sri Lanka Police and employees of Sri Lanka Telecom (SLT) who engaged in a one-day strike today to protest the government’s decision on the sale of shares of the SLT.

The strike action was launched with the participation of 18 trade unions of the SLT.

The SLT employees engaged in their strike action in front of the Telecom Headoffice location at Colombo- Fort. (NewsWire)

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