NTT says Govt. approval not required for sale of SLT shares

By Stanley Samarasinghe
Approval of Government of Sri Lanka is not necessary for share transfer of Sri Lanka Telecom in terms of agreement entered between NTT and Government, NTT of Japan Telecommunication in its written submission has disclosed to the Supreme Court.

This was disclosed following the Fundamental Rights Application filed against selling of Sri Lanka Telecom shares to Global Telecommunication Holdings of Malaysia by NTT of Japan.

There is no such condition of obtaining the approval of government of Sri Lanka or an option of first right of refusal, under the said agreement dated 13th November 2002. The original agreement entered into between NTT and GOSL dated 5th August 1998 terminated on 13th November 2002, NTT further stated in its written submissions.

Former MP Sripathi Sooriarachchi originally filed this application. Later following his demise, former Minister Mangala Samaraweera was substituted as the Petitioner.

Petitioner alleged that the government intends giving management rights in Sri Lanka Telecom (SLT) to the purchaser Global Telecommunications Holdings which is against the interest of SLT, the government and the public of Sri Lanka.

When this case came up on Monday before the Bench comprising Chief Justice Sarath N. Silva, and Justices Nimal Gamini Amaratunga, Jagath Balapatabendhi, the Additional Solicitor General P. A. Ratnanayake, PC, appeared for Attorney General and submitted to court that GTH and NTT filed joint motion stating that they do not want to enter into share holders agreement with the government represented by Secretary to the Treasury.

Ratnayake further told the court that NTT who owned 35% of shares, now own not more than 10% of shares, and as a result of it the shareholder agreement with the government comes to end.

Ratnayake explained to the court that the majority of shares of SLT is owned by the government, which thus has the total control of the SLT.

If government wants to enter into a share holders agreement in future, it will be done in a transparent manner after giving due publicity to it.

President Counsel Romesh de Silva appearing for the Petitioner, submitted that he received instructions that the proceedings would be terminated in terms that the shareholders agreement would not be continued, and the government would not be a party to the sale of shares.

Counsel further said that any agreement made in respect of the management would have to be transparent and the public to be informed.

Court held that concern of the general public is met as clarified by Additional Solicitor General, and therefore proceedings were to be terminated.

Heavy interest on SLT shares after Court ruling

Investors chased after shares of Sri Lanka Telecom (SLT) propelling its price as well as the market after the Supreme Court on Monday ruled that the proposed sale of shares by NTT of Japan could go ahead.

Yesterday SLT’s price shot up to a high of Rs. 38.50 before closing at Rs. 38.25, an increase of Rs. 1.50 with 6 million shares traded. This was higher compared with 3.7 million shares traded on Monday when the stock price closed up by only 25 cents.

Analysts said that investor appetite for SLT shares would only grow further as the Court ruling has put the previously announced sale of 25% stake held by NTT to Malaysia’s Maxi’s. Though the planned sale would not trigger the takeovers and mergers code, brokers expect retailers to see great upside in the SLT share.

SLT helped Colombo bourse rise to a new three and a half months high.