June 14, 2007 (LBO) – Sri Lanka’s highest court halted the sale of shares of the country’s largest fixed access operator to a Malaysian firm Thursday, after a lawmaker filed suit against the deal. Sri Lanka Telecom slid 1.50 to close at 37.00 on Thursday. Japan’s NTT which holds a 35.2 percent stake in Sri Lanka Telecom was negotiating to sell a 25.3 percent stake of the Telco to the Usaha Tegas group of Malaysia controlled by billionaire Ananda Krishnan.
The Supreme Court suspended the sale, pending a full hearing of the petition and also directed all documents relating to the deal to be filed in court.
NTT has a contract to manage Sri Lanka Telecom which expires as soon as its stake falls below 10 percent.
The government which owns 49.5 percent of Sri Lanka Telecom has appointed a committee to work out a new management agreement with the Malaysian group.
Lawmaker Sripathi Sooriyarachchi who was sacked earlier in the year as a minister by President Mahinda Rajapakse, went to court alleging that the sale caused losses to the government and the country.