Features

My experience in turning around the Merchant Bank of Sri Lanka (MBSL) – Episode 4

Published

5 months ago

2026/03/1

Thilina Walpola

LESSONS FROM MY CAREER: SYNTHESISING MANAGEMENT THEORY WITH PRACTICE – PART 32

Previous episodes

In the previous episodes, I described the many challenges I faced after accepting the position of Managing Director of the Merchant Bank of Sri Lanka. It was a daunting task. The Bank had recorded a loss of nearly rupees one billion in the previous year.

I knew exactly what I was getting into, but the prospect of a serious challenge lured me into accepting the position—despite my wife’s strong objections. Her concerns were not unfounded. My office was on the 18th floor, and above it an Air Force unit equipped with anti-aircraft guns was posted. Because of its height, the building itself was considered a prime target for the LTTE at that time.

Previous episodes related to my implementing a new management style and a new management culture.

Restructuring continues: The capital reduction

The final stage of the restructuring process was a capital reduction, aimed at reducing the number of issued shares. This was not a straightforward exercise. It required careful study, and we therefore commissioned a leading law firm, together with capital market experts, to guide us. There were many obstacles to surmount such as getting shareholder approval, getting a court order in support, and finally the approval of the Registrar of Companies.

Our company secretary was deeply involved in studying the required procedures as very few professionals in Sri Lanka had prior experience with capital reductions at that time. I myself had been involved—albeit in a limited capacity—in the capital reduction of Dockyard Ltd, where I served as Vice Chairman, representing the interests of the Employees’ Trust Fund, of which I was Chairman during the 1990s.

After extensive research and consultation, we finally arrived at an appropriate formula. However, we soon realised that the process itself was extremely complex. Under the old Companies Act, the proposal had to be submitted to the court first, and only after obtaining court approval could we apply to the Registrar of Companies to proceed.

During my own internet research, I came across numerous examples of capital reductions from around the world. I learned a great deal from these case studies. The Singapore examples, in particular, were remarkably precise. One example even provided exact timelines—specifying the precise dates on which the court order would be granted and when the Registrar of Companies would issue approval. Subsequent events, however, proved that such meticulous planning was impossible in our context.

The Extraordinary General Meeting (EGM)

We cleared the first major hurdle by obtaining the lenders’ approval. The next step was to convene an Extraordinary General Meeting (EGM) to secure shareholder approval. Unfortunately, the EGM did not go as planned.

The meeting was delayed because the Chairman arrived late and shareholders were becoming increasingly restless. For an event of such importance, I had expected the Chairman to arrive early, mingle with the shareholders, and personally explain the necessity of the capital reduction.

As the delay dragged on shareholders began shouting demanding that I take over as Chairman and conduct the meeting myself. I was frantically trying to reach the Chairman by phone, but there was no response. His secretary eventually informed me that he was held up at another “important meeting”.

When he finally arrived—half an hour late—he walked into an openly hostile gathering. I immediately sensed that this mood would affect the smooth passage of the resolution. My fears proved justified.

I had prepared a very detailed presentation explaining the past, present, and future, and outlining exactly how the capital reduction would work. In simple terms, we were cancelling a portion of the shares held by shareholders, but they would not lose value.

To explain this, I will use a hypothetical example with imaginary figures. A shareholder holding 10 shares at a market value of LKR 10 per share would, after a 50% capital reduction, hold five shares. However, each share would then be valued at LKR 20, once the market adjusted to reflect the reduced number of shares. In other words, we were only eliminating what lacked real value. The shareholder’s total investment value would remain unchanged; only the number of worthless shares would disappear.

As I continued my presentation, I noticed that most of the senior shareholders appeared disinterested. Only a handful of younger participants showed any real engagement. At that moment, I realised a hard truth: a technical presentation was completely lost on this audience. They were emotionally charged and had little interest in logic or financial theory.

When the resolution was finally put to the vote, chaos erupted. My attempts to provide further explanations were futile. After nearly half an hour of confusion and raised voices, another Director—a highly respected individual—stood up, took the microphone, and addressed the shareholders.

He said simply:

“I know most of you, and most of you know me. There is only one issue here. If you want MBSL to continue operations on January 1 next year, please vote Yes. If you want it to shut down, vote No. So please raise your hands now, those in favour?”

A few hands went up immediately, followed by the majority. Only a handful voted against the resolution. The motion was carried.

Lessons learnt

That meeting taught me three important lessons.

First, shareholders are extremely sensitive stakeholders. If they feel disrespected, they can behave irrationally. Keeping the waiting for half an hour was disrespectful. Second, technical presentations are better suited to younger audiences, whereas emotional appeals resonate more with senior audiences.
Third, chairing a hostile meeting requires enormous experience, patience, and excellent listening skills.

Years earlier, while following a course in Japan, I had learned techniques for handling hostile subordinates and difficult teams. Had I been chairing that meeting, I would certainly have drawn on those lessons.

Obtaining the court order – and how the tsunami almost destroyed our plan

The next phase was obtaining the court order. After extensive preparation, we made the final court filing and waited anxiously. It took time, but eventually we were informed that the court had approved the capital reduction.

Once we received the court documents, the final step was to apply to the Registrar of Companies. All documentation was completed, and we followed up on a daily basis. On one particular Friday, we were informed that approval would be granted on the following Monday in December 2004. Then, quite unexpectedly, the tsunami struck.

The country descended into chaos. Nothing moved. Sri Lanka was in shock. Many people lost their loved ones. We were unable to contact the Deputy Registrar who was required to sign. When we finally reached him on Tuesday, he was in the South searching for his missing relatives. Understandably, he was in no mood to attend to official matters.

We empathised deeply with him but time was running out for us. If the process was not completed before December 31, 2004, we would have had to start all over again—a delay of several more months. We simply could not afford that. The bank was still haemorrhaging, and we desperately needed a closure of this exercise.

After many anxious moments, the approval finally came through on December 31, 2004, just moments before the deadline expired. It was an extraordinarily close call. There is no doubt that the stress and pressure of those days took a toll on our entire team’s health.

Closure and recovery

With the capital reduction completed, our balance sheet was finally clean. We announced a debenture issue, which was reasonably well subscribed, and we were able to refocus on core business operations.

Over time, we generated sufficient profits to pay dividends to shareholders, restore the staff bonus scheme, and reinstate all benefits suspended earlier. Trade union members once again participated actively in organisational activities.

My job was done. The promises I had made—to the Board, the staff, and the stakeholders—were honoured. I must say that this was not my single effort but a team effort. The team supported me at every turn, and remained committed until the end. It was a wonderful team and a wonderful Board.

The decision to leave MBSL

I was concurrently serving as Non-Executive Chairman of Dankotuwa Porcelain, a company with majority control by Japanese investors at that time. During that period, one CEO resigned after three days, another after one year, and a third also resigned prematurely. The Japanese shareholders—a consortium of three companies—told me that finding a suitable CEO was proving extremely difficult. They requested that I take over as full-time Chairman and Managing Director.

This request was made while the restructuring at MBSL was still on-going. I made it clear that I would not leave MBSL until I had delivered on my commitments. Once the restructuring was completed, they approached me again and asked, rather pointedly, “Now what is your excuse?” I had none.

I decided to move on to Dankotuwa Porcelain. I had always enjoyed working with the Japanese, and I felt completely comfortable with their management style. My experience at Dankotuwa Porcelain will be the subject of the next article.

Many people had raised their eyebrows when I first joined MBSL. “Are you mad to take the helm of a company in deep trouble? It is like flogging a dead horse” they told me. As I mentioned in an earlier article, even Mr Ken Balendra, the Chairman at the time, warned me that I was wasting my time and ruining my reputation.

Ironically, when I decided to leave, the same people asked, “Are you mad to leave a stable, profit-making company?”

I will cherish my time at MBSL for as long as I live. It was a tough assignment, but also exhilarating and deeply rewarding. When I later met Mr Balendra at the Golf Club, he simply said, “I knew you would do it.”

My personal policy has always been this: leave when people still want you, and never overstay until people have had enough of you. Equally important, I believe, is creating space for subordinates to move upward and grow. The next episode will cover my period at Dankotuwa Porcelain.

(The writer is a Consultant on Productivity and Japanese Management Techniques
Former Chairman/Director of several listed and unlisted companies
Recipient of the APO Regional Award for Promoting Productivity in the Asia-Pacific Region
Recipient of the Order of the Rising Sun, Gold and Silver Rays, Government of Japan
Email:

bizex.seminarsandconsulting@gmail.com)

By Sunil G. Wijesinha

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Features

The hard challenge of clinching a political settlement in the Middle East

Published

23 hours ago

2026/07/23

Sahan Weerasooriya

Bruised hearts: Displaced Palestinian civilians in the Gaza.(Photo by Mustafa Hassona/Anadolu via Getty Images)

Despite some sections of the Trump administration persisting with the view that the possibility could not be entirely ruled out of there being a diplomatic solution to the current US-Iran hostilities in West Asia, the skeptic could not be blamed for thinking otherwise. The intensity, scale and frequency of the tit-for-tat strikes by the antagonists over the past few days against selected military targets and civilian infrastructure in particular in West Asia make the adoption of this stance excusable.

The continuing hostilities render the mentioning of the MOU signed between the warring parties in mid-June a laughable matter. While it could very well be that the foes are wishing privately for a cessation of hostilities before long, what seems to be uppermost on their minds right now is to negotiate with each other from a position of strength. This strategy compels them to incapacitate each other militarily to the extent possible, lest they have to concede too much to each other during negotiations. Hence the stepped-up hostilities.

However, even on the question of there being a negotiated political settlement in the West Asian theatre in the longer term, the skeptic could come to be seen as scoring over the optimist. Developments on the ground account for this.

At the time of writing Israel’s Netanyahu government is going ahead in fairly care-free fashion with the establishment of more Jewish settlements in the Gaza and the West Bank, and it’s all happening under the apparently complacent gaze of the US. In fact, some quarters estimate that Israel is in control of some 65% of the Gaza Strip. Ethnic cleansing, that is, is being drastically stepped-up.

Accordingly, in terms of the power relations of West Asia, the world is almost back to the status quo of the late forties of the last century when the state of Israel was established and the Palestinians were reduced to a microscopic minority in the land they came to inhabit. Therefore, even the impartial observer would be compelled to ask: ‘Will a negotiated peace be ever possible in the Middle East?’

The humanist in the observer would prefer to answer this question in the affirmative and it is indeed the ideal stance to adopt considering the staggering human and material costs of the conflict. But the way ahead to peace could be expected to be highly hazardous and arduous. Among other odds, it would also prove an uphill endeavour to win minds and hearts.

The US’ Trump administration would need to be counted out in this pursuit. This is on account of the fact that it has been far too wayward in its management of West Asian affairs in particular over the past couple of years. Given its unpredictable character it is a matter for conjecture whether it could be counted on to live up to its commitments.

Moreover, Israel could be expected to ‘go it alone’ in the Middle East regardless of whether US help is coming or otherwise. It has indicated as much in recent times and Israel could be doubted on this score only at the doubter’s peril. Because time and again Israel has demonstrated that it could steadfastly defend its interests even single-handedly in the Middle East. History bears this out.

However, a durable alliance with the US would stand Israel in good stead. On the matter of military and intelligence assistance, for example, the US’s help proved invaluable for Israel in the past and going forward this is bound to be so as well. Moreover, it is unlikely that the Trump administration would give up on Israel, considering that a strong Israel is crucial for the furtherance of the US’ strategic and economic interests in West Asia.

But whether the above factors would have a considerable bearing on the question of working out a durable solution to the West Asian tangle is an entirely different matter. Israel, as in the case of the Palestinian enclaves, is acutely security conscious and would need to satisfy itself fully that it could live in a security environment that would guarantee its complete safety, going forward.

The Middle East is badly in need of another peace effort on the lines of the Oslo Accords of the mid-nineties that brought the key actors together and helped hammer out a solution that addressed some of their notable concerns. To be sure, that process did not prove to be the ideal answer to the tangle, but it yielded some respite to the region and drove home that one-time sworn foes could indeed negotiate with a degree of success. The West Bank authority, although falling short of fulfilling some key Palestinian aspirations, is testimony that a degree of success is possible if the intent is right.

Given the current realities of West Asia, peace-making is bound to be an uphill challenge. The violence faced in recent times by the Palestinian community, in particular, has been nothing less than mind-numbing. Merciless has been the violence visited on them by the Israeli side. In such circumstances, durable peace in the region could smack of an idealist’s dream.

Nevertheless, there needs to be urgently, a meeting of minds over the divides. The US would need to be counted out as an honest broker in bringing the sides together but the rest of the West would do well to step up to the challenge.

In this exercise the onus would be on the world’s democracies to take the initiative and doggedly stay the course. An acceptable combination would be the EU and the UN. Given their credentials, the main sides in West Asia ought to find them the least controversial.

Even if the relevant institutional and political arrangements could be shored up to take a reconciliation process forward, winning hearts and minds for the peace drive would prove a grueling challenge. Over the past few years in particular tens of thousands of hearts and minds on both sides of the divide have been bruised badly in the runaway murderous violence that has come to define the Middle East.

These badly scarred personalities would need to experience healing without much delay. It is therefore a multi-faceted challenge that is at hand. Since wide-ranging expertise would be needed in the healing process, people’s participation in peace-making, ranging over the divides, would need to be made a durable reality. It will be a time for enthroning humanity and ensuring the rejection of all forms of violence and coercion.

Features

Amazing Thailand …right here in Colombo

Published

23 hours ago

2026/07/23

Sahan Weerasooriya

For many Sri Lankans, Thailand is the go-to holiday — beaches, temples, food, and that famous warm hospitality.

In fact, I’ve been to Amazing Thailand 24 times myself, and was honoured with the Friends of Thailand International Media Award by the Tourism Authority of Thailand for promoting Thai tourism.

The good news I have for you today is that you don’t even need a passport to get a taste of Amazing Thailand.

The Royal Thai Embassy, in Colombo, is bringing a vibrant slice of Thailand, to the city of Colombo, with Thai Festival 2026 — a cultural experience like never before.

Whether you are an avid enthusiast of Thai culture, a total novice, or simply just interested in exploring foreign cultures, Thai Festival 2026 is going to be the perfect opportunity for you to get more than just a glimpse into one of the most celebrated cultural heritages in South East Asia. And ENTRANCE IS FREE.

The festival will be held on the 1st and 2nd of August, 2026, at Siam Nivasa, 43, C.W.W. Kannangara Mawatha, Colombo 7, and the East Parking Area, of the Colombo Municipal Council, from 11:00am to 5:00pm.

Both days will be full of live entertainment, and dispersed throughout with Thai cultural displays, including exhilarating traditional dance performances and breathtaking Muay Thai demonstrations.

Exploring art and craft specific to Thailand, tasting irresistible authentic Thai cuisine, and playing arcade games, are just a few more fun-filled events available for visitors at the festival premises.

An array of Thai products will also be available for purchase.

While at the festival, you will find Sri Lankan Alumni from Thai universities sharing their experiences with you and willing to answer any questions you might have, related to studying abroad in Thailand.

You can also register for the Muay Thai workshop that will be happening on the 7th and 8th of August, 2026, in Colombo.

Irresistible authentic Thai cuisine

Visitors can also stand a chance to win traditional Thai souvenirs, get exclusive photo opportunities, and, the big one — to enter the raffle draw, at the end of each day, for the grand prize of an all-inclusive round trip to Thailand.

Be sure to avail yourself of this exceptional opportunity and add a cultural spin to your weekend.

To keep up with the latest updates on Thai Festival 2026, head over to the Thai Festival official social media pages.

The Royal Thai Embassy in Colombo official webpage:

https://colombo.thaiembassy.org

Official social media:

Facebook: @RTEColombo

Instagram: @thaiembassysrilanka

Thai Festival official social media:

Facebook: Thai Festival in Colombo

Instagram: @thaifestival_colombo

TikTok: @thaifestival.incolombo

Features

Thicker, stronger hair …

Published

23 hours ago

2026/07/23

Sahan Weerasooriya

Hair fall, in this heat, can be so frustrating, and noticing a thin patch is even more worrying. The good news is … yes, with a little care and kitchen ingredients, you can nourish your scalp and support healthy regrowth.

Try these four easy home remedies … even our grandmothers trusted:

* Coconut Oil and Curry Leaves Tonic:

Warm 04 tablespoons of coconut oil, with a handful of curry leaves, till the leaves turn black. Cool, strain, and massage into scalp 02-03 times a week. Leave for 01 hour, or overnight.

Why:

Coconut oil deeply nourishes, while curry leaves help strengthen roots and add shine.

* Onion Juice for Spot Treatment:

With cotton, dab the juice of 01 small onion, directly on the thin/bald patches. Leave for 20-30 minutes, and then wash with a mild shampoo. Use twice a week.

Why:

Rich in sulfur, onion juice helps boost blood circulation to the scalp.

* Aloe Vera and Castor Oil Mask:

Mix 02 tablespoons of fresh aloe vera gel and 01 tablespoon castor oil and apply to the scalp, focusing on thinning areas. Leave for 45 minutes, and then rinse with cool water.

Why:

Aloe vera soothes the scalp, while castor oil coats hair to make it look thicker.

* Fenugreek and Curd Strengthening Pack:

You will need 02 tablespoons fenugreek seeds, soaked overnight, and 02 tablespoons plain curd.

Grind to a paste, apply to scalp for 30 minutes, and then wash.

Why:

Fenugreek strengthens strands and reduces breakage.

Extra Tips for Healthy Hair:

Avoid tight hairstyles that pull on the scalp.

Eat iron and protein rich foods: greens, dhal, eggs, fish.

Use lukewarm water, not hot.

Be gentle when brushing and drying.