Sunday May 19, 2024
Sunday May 19, 2024
Friday, 21 July 2023 00:00 - - {{hitsCtrl.values.hits}}
Ousted SLT Chairman Rohan Fernando (left) gestures during a media briefing yesterday afternoon. Right new Chairman Reyaz Mihular
– Pic by Upul Abayasekara
By Nisthar Cassim
Award winning entrepreneur cum exporter Rohan Fernando yesterday cried foul after Sri Lanka Telecom (SLT) Board by majority voted him out as the Chairman in an unprecedented move.
Functioning as Chairman since January 2020, Fernando was perplexed when at yesterday’s Board meeting he was told by the Director and Remuneration and Nomination Committee Chairman Chan Chee Beng that a majority of Directors approached him and wanted a new head to chair the Board Meeting. In that context the rest of the Board colleagues had indicated Fernando it was better to step down. However Fernando countered saying his removal must be done by the Government/Treasury hence refused to step down and implied he be removed. Thereafter the matter was put to vote which saw 7 members out of 10 voting in favour of removal.
Those who voted for removal were Directors Chan Chee Beng, Lawrence Paratz, V.U. Kumar and Suren Amarasekere, Independent Non- Executive Director Reyaz Mihular, Director Ranjith Rubasinghe, and Treasury nominee K.A. Vimalenthirarajah. Two Directors (Mohan Weerakoon, PC and Lalith Seneviratne) abstained and Fernando voted against.
Thereafter a resolution to appoint Non-Executive Independent Director Reyaz Mihular was passed unanimously. Mihular informed Fernando that he remains a Director hence can continue in the Board Meeting but the latter walked out.
Secretary to the Treasury owns 49.5% stake in SLT whilst Global Telecommunications Holdings (GTH) NV (linked to Malaysia telecom firm Maxis) holds 44.98%.
Daily FT learns that being minority shareholder Maxis/GTH nominee directors had only voted in favour of a Government-backed move for removal of Fernando and was following legal advice.
Sources said that the Board found that Fernando despite the status of Non-Executive Chairman was interfering too much with management of SLT whilst some of the recent initiatives such as shifting to a new headquarters at Borella were questionable.
SLT share price wasn’t impacted due to the removal of Chairman as it closed with a gain of Rs. 1.80 to Rs. 99.
However Fernando who convened a press conference in the afternoon tossed phrases such as “Board Room Coup or Manipulation, as well as a “conspiracy” said he was shocked by the conduct of the Board members and the issue could have been resolved amicably and with decency. He said prior to yesterday engagement with Board members had been very cordial.
“I have not resigned but I have been dis-placed as Chairman,” he said.
He wasn’t sure whether a Chairman could be removed in such a way as the Articles of Association was too vague and ambiguous about the course of action and he would seek legal advice as well as write to the Treasury.
SLT›s Articles of Association reads «The Directors may appoint and remove the Chairman of the Board at their respective meetings and may determine the period for which he is to hold office. The Chairman so appointed shall preside as Chairman at meetings of the Directors....»
Fernando was handpicked by the then President Gotabaya Rajapaksa to be the Chairman of SLT in 2020 January after the former refused to serve as Tea Board Chairman given his interests in the tea industry. Despite being a Presidential appointee, Fernando yesterday said he remained apolitical during his tenure as SLT Chairman and ensured significant progress maintaining industrial peace despite the organisation being infested with 27 trade unions.
He also cited record turnover, profit and dividends during his tenure driven by four values – eliminate corruption, minimise waste, improve efficiency and collaboration. SLT has an employee base of 7,500. However he cautioned that in FY24, due to higher taxation, exchange rate fluctuations and higher costs, SLT performance will be impacted. Insiders claimed that the 2Q results will vindicate removal of Fernando as Chairman given losses including at Mobitel.
Nevertheless, Fernando argued that removing the Chairman of a non-performing enterprise is justifiable. Fernando also opined that his removal could be because some perceived he is a barrier for the proposed divestiture of Government stake in SLT. Noting that being a CSE-listed entity shares of SLT are anyway being traded and shareholders have their rights. I have no qualms about divestiture but it must be done correctly,” he said adding that national and social security were concerns in a future divestiture. Maxis or GTH has conveyed to the Government that it wasn’t interested in acquiring the balance stake.
Fernando also opined that the Government should consider divesting 15-30% stake to employees of SLT with representation on the Board. “SLT is the jewel of Sri Lanka’s crowns and it can be the country’s number one corporate and we were getting there,” Fernando claimed.
He also recalled that SLT was a model privatisation during the regime of President Chandrika Bandaranaike Kumaratunga. He recalled that SLT staff appreciated the role played by NTT of Japan though it was wrongly ousted by the then administration.
Fernando also said that since assuming chairmanship of SLT, he hadn’t drawn a salary and controversy arose over use of a new vehicle recently. “I didn’t do this job for a living. Being removed as SLT Chairman is not a loss of employment or income. I am not a political lackey to run behind the Government to restore my job,” emphasised Fernando. He claimed that Sri Lanka has gone down because of politics.
