Land Locked

April 28, 2007 (LBO) – A deal to sell a prime commercial property belonging to a troubled state trading firm to a state-bank has got deadlocked with creditors scrambling after the property, but the bank has recovered an advance that it paid, a top official said. Last year the bank made 1,919 million rupees in consolidated net profits, down 10.5 percent from the 2,124 billion a year ago.

The Co-operative Wholesale Establishment (Sathosa) which collapsed under its debts, wanted to sell a land in Union Place to raise money to compensate retiring workers.

However, due to the government’s policy of not selling state-assets to the private sector, it was decided to sell the land to state-owned National Savings Bank.

“We wanted to build luxury apartment there,” NSB Chairman Upali Gunaratne told LBO.

The bank advanced 500 million rupee for the property pending its transfer. However, Sathosa could not transfer the land as its creditor banks went to court.

NSB had then deducted the money from the dividend it had to pay the Treasury.

“We did not give the money directly to the CWE but to the Treasury,” Gunaratne said.

He said the NSB had not lost out on the deal as the money had now been recovered.

If the land could be cleared