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Sat, 01 November 2014 02:39:51
Sri Lanka JKH bunker unit starts to move out
09 Sep, 2008 04:59:37
Sept 09, 2008 (LBO) - Sri Lanka's John Keells group says it bunkering unit had already begun the process of handing over a tank farm to Colombo port, and full disclosure of a Monday court order will be made after getting official documents.
Lanka Marines Services (LMS) had been given till September 10 to move out of a tank farm, after the firm said an original deadline could not be met because worker unrest was preventing the movement of oil stocks.

"The Supreme Court today considered the application made by LMS in SC FR 209/2007 for an extension of time to vacate the Bloemendhal Land," John Keells Holdings said in a statement Monday.

"When the case was taken up, LMS confirmed to Court that it will vacate the land as per the Court order.

"A certified copy of the order made by the Supreme Court should be available to LMS by tomorrow enabling the company to make a fuller disclosure of the orders of Court.

"LMS informed Court that it had already begun the process of handover to the SLPA."

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READER COMMENT(S)
5. Harry Sep 12
Indeed this is 'creeping' expropriation where the Govt is either directly or indirectly taking over the assets of LMS in a series of acts over time.

If you really analyse what has happened to some of the privatisations done during the Chandrika and Ranil regimes, what you will find is the following:

1998- Sri Lankan Airlines 40% stake sold to Emirates at USD 70Mn and management control.

Management agreement frustrated and Emirates moves out in 2008 retaining 40% equity stake.

1997 -SLT 35% stake sold to NTT for USD 225Mn and management agreement signed.

Management agreement cancelled mid way and NTT forced to exit selling stake to Maxis in 2008.

2002 - Lanka Marine Services 90% stake sold for USD 12Mn to JKH. Presidential advisor Vasudeva files fundamental rights application in 2007 that result in court annuling the land transfer and cancelling the BOI agreement whilst keeping the privatisation agreement valid. Effectively forces LMS to discontinue operations at tank farm and pay back taxes. This is a very far reaching judgement that sets a very bad precedent for future private investment in Sri Lanka. The irrational basis of arriving at some of the findings is simply astounding.

2002 - SLIC sold to consortium headed by Distilleries Corporation. Presidential Advisor Vasudeva files another Fundamental rights case in 2007 challenging privatisation. Judgement delayed possibly due to horse trading?

2002- Lanka IOC introduced as second player in petroleum sector to operate 100 CPC petrol sheds on agreed pricing formula. Extensive pressure brought on LIOC to manipulate prices to offset losses at CPC. Threat of takeover by Petroleum Minister.

Are we seeing a common thread in all these activities. With the exception of LIOC all these transactions are competitively awarded after going thro all Govt processes including Attorney General's Department approval and cabinet approval.

As investors are not privy to the inner workings of Govt and the approval process, the Govt has in all agreements given specific warranties and undertakings that it has obtained all necessary approvals and consents to enter into the agreements.

In future investors may need to ask for copies of cabinet papers and decisions, TEC reports, AG's Dept approval letters,etc to establish for themselves the bona fides of the Govt.

What a pathetic situation we are headed for thanks to some brainless actions of a handful.

With the fiasco on LIOC, it is quite laughable that the BOI Chairman in his usual 'bull in a china shop style' has invited Tata to establish their factory for the Nano car in Sri Lanka. When will they ever learn.

Is Sri Lanka sending a very clear message to the investment community both local and foreign that it does not keep its word, honour legally executed agreements, and that investors do not have any assurance of investment protection despite what the Board of Investment claims. Where exactly are we headed ???

4. Ayiyo Sep 12
Wait wait till the war ends and there is nothing left to compliment the govt. about, then all the bad actions will be exposed one by one and people will realize that it is a militarized state with no ethical practices and a poor and dangerous environment for commerce
3. Investor Sep 11
I agree with SJ. If this business did not make so much money, no one would have been interested.
This will act as a major deterrent to investment. How does one rely on any government assurance now.

How are investors protected against retroactive actions like this

2. abe Sep 10
Privatisation not giving under hand deals - that will discourage genuine investors

It's strong messege send to genuine corporates ensuering that only ethical pracatices will yield the shareholder value. we salute uncorrupted legal system of the country

1. Swarna Jayawardene Sep 10
Expropriation!!
So… this is the trend …. the reacquisition of enterprises which were privatized but which are now spectacularly profitable Sri Lankan,. LMS, SLIC,

How is Sri Lanka to attract much needed investment for our roads, power and ports if the government allows this sort of thing?

Is this the end of business in Sri Lanka?