Govt. returns Rs. 5.7bn to Distilleries for SLIC shares


The government has returned Rs. 5,715.9 million to a subsidiary of Distilleries Company of Sri Lanka PLC (DCSL) which was due for divesture of Sri Lanka Insurance Corporation Ltd, a stock exchange filing said.

DCSL in a statement to the Colombo Stock Exchange yesterday (31) simply said the government has returned the Rs. 5,715,899,526 that was paid by DCSL subsidiary Milford Holdings Pvt. Ltd to purchase 510,178,476 shares of Sri Lanka Insurance Corporation.

Milford Holding Pvt. Ltd of Singapore and its local agent Greenfield Pacific EM Holdings Ltd had bought a 90 percent stake of state owned SLIC for about Rs. 6 billion, these entities being controlled by business tycoon Harry Jayewardene, as is DCSL.

But judicial activism resulted in the cash cow being returned back to state control after Nihal Sri Ameresekere and Vasudeva Nanayakkara questioned the legality of the privatisation of SLIC before the Supreme Court.

In 2009, the court ruled that the privatisation deal was unlawful and SLIC and DCSL had to return its control to the state.

At the time the government said it would issue five year bonds amounting to Rs. 6 billion.

The Island Financial Review contacted DCSL Head of Finance N. Nagahawatte, under whose signature the above statement to the stock exchange was made yesterday (31). We inquired as to whether the government had paid in cash. He said he was not in a position to answer.

Nagahawatte directed us to Damien Fernando, a Director of DCSL, who did not return our calls at the time of going to press.

Analysts said however, the government could have retuned its dues to DCSL in cash after a recent windfall when the recently concluded US$ 125 million land deal involving Shangri La resulted in an upfront payment of US$ 75 million.

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