New Deal

May 18, 2007 (LBO) – A new deal between the buyer of Japan’s NTT stake in Sri Lanka Telecom and the government is being hammered out in a way that will protect the interests of the 49 percent state holding, a top government official said. Treasury Secretary P B Jayasundera told reporters there was no hidden mystery behind the sale of a 25 percent slice of NTT’s 35 percent stake in Sri Lanka Telecom to Usaha Tegas and it was not contrary to the government’s anti-privatization policy.

Meanwhile, a source closed to the deal said a cabinet appointed sub-committee has finalized most of the provisions in a new agreement to be signed with the buyer of the NTT stake.

The committee has met several times and Malaysians as well as a Sri Lankan national representing Usaha Tegas had made submissions to the committee.

Both parties wanted the right to appoint the chief executive, but a compromise may be worked out by providing for a bi-annual review, sources said.

Though a sale of a stake in a listed company, by a private party would not usually attract allegations of government corruption, NTT’s sale of Sri Lanka Telecom has become a controversial issue.

This is because the government’s nod is needed for a new investor to buy N