Opacity leads to confusion in SLTL share sale

Posted on May 29, 2007  /  1 Comments

The usually well-informed LBO.LK appears to have gotten confused in the “fog of war” created by interested parties seeking to extract rents from the sale of 25% of SLTL shares by NTT to GTH, both private companies, and by the unfortunate opacity of the transaction (something that is quite surprising because SLTL is a publicly traded company and the interests of thousands of shareholders are affected by the transaction).

The source quoted by LBO below appears to have been quite familiar with the ORIGINAL shareholders agreement signed between the Government of Sri Lanka and NTT in 1997, but appears to have been comatose since then. Provisions regarding no universal service obligations (USO) and international exclusivities were in that agreement and did bind the Government of Sri Lanka. The no-USO provision continues to date, though the international exclusivity ended with the issuance of external gateway licenses in March 2003.

Why LBO’s anonymous source is claiming that provisions that were in force since 1997 are newly being imposed in 2007 is a mystery. And how the humpty dumpty of SLTL’s ambiguous international exclusivity can be put back again, the Rip van Winkle interviewed by LBO does not tell us.

If the Colombo Stock Exchange applies its rules without exception this kind of confusion can be avoided. Why does it not? Should the SEC get involved?


Sources familiar with the deal’s provisions claimed it could also undermine telecom regulation in the future because it prevents a universal service obligation being imposed on SLT and has provisions to protect its dominance in international telephone services.

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  1. Sri Lankan shares up on Sri Lanka Telecom,Sri Lankan shares led by gains in Sri Lanka Telecom as investors anticipated sharp gains.. Found info on CSE blog