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On to the private sector – JKH, Hemas and Schaffter company

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Working simultaneously with state and private sectors

(Excerpted from the autobiography of Lalith de Mel)

About the time I joined the SLT Board, Ken Balendra, the Chairman of John Keells Holdings, invited me to join the Board of his company. That was the start of my working simultaneously with the private sector and the State sector. Ken was a strong personality and could by himself enforce the disciplines of good governance. He was due to retire and he felt, and I think correctly, that he should leave JKH with a more formal structure to ensure good governance. He appointed three Independent Directors, S. Easparathasan, Franklyn Amerasinghe and myself, and later Tarun Das.

There was a major issue with the management arrangements at JKH. It had a serious ‘Parents-and-Children’ syndrome. The Executive Directors managed their segments of responsibility, like a chief executive. So they became the children managing the business. But they were also in corporate terms the parent responsible to the Board for this segment’s activity. So in effect they reported to themselves for their area of responsibility. So they were both parents and children.

In management terms this was a bad model and has been extensively discussed in the literature. I found a very good book on the subject and insisted that they all read it. The JKH team comprised nice and intelligent people and they were prepared to think positively about change where it was necessary. It was a pleasure working with this group, and they appreciated what I did for them.

They accepted that the business units should have a head reporting to the Directors – a separation of parents from children. The parents would be accountable to the Board. This is the classic management model and I was glad to take JKH down this road.

JKH had an entrepreneurial culture. I think this heritage came from Mark Bostock’s time. Instinct had played a role in selecting acquisitions. Persuading them to adopt hurdle rates and cash-flow paybacks helped to test acquisitions and to dispose of some bad acquisitions. When I was on the Board, the LMS (Lanka Marine Services) acquisition came up for discussion. The financials were good. I had a Shell background in my youth and knew something about petroleum products and bunkers.

I discreetly asked Susantha Ratnayake (who was promoting the acquisition) whether he or JKH knew anything about the bunker business. He said, `No, but Sir, it is not rocket science and we can learn it.’ He had acquired some of the JKH entrepreneurial culture. It was brave of him to persuade the Board to buy a business without knowing the business. They bought it and it was very profitable.

Ken Balendra knew his team better than anybody else and had selected Lintotawela to succeed him. He was a finance man and perhaps Ken thought it best to have a numbers man to preside over his entrepreneurial troops. I did not think he was quite JKH style and thought that Susantha was the driving force in the business. After I left the Board, whenever I met Susantha I told him that he was developing a stoop by carrying the business on his shoulders (he turned a light shade of pink and hated me for saying it). Subsequently Susantha Ratnayake became the very successful Chairman of JKH.

LEAVING JKH

I met Abbas Esufally, I think it was at the Golf Club, and he said Hemas was debating whether to go public (with a listing on the CSE), and he wanted me to help them to decide, and if they went ahead to help them through the process. I agreed to meet them and talk about it as I held the view, and still do, that a private sector economy would survive best if all the big companies went public, so that the wider public could also benefit from their success, and this would create inclusive growth.

Eventually I agreed to help Hemas, and I told JKH about it. Lintotawela was unhappy and I could not be on the JKH Board and the Hemas Board. He saw a conflict of interest because JKH was in Hotels and Serendib had three hotels, one in Sigiriya and one in Waikkal, where JKH had no hotels, and one three-star in Bentota where JKH had the five-star Bentota Beach Hotel. The JKH team tried to persuade me to dump Hemas and stay with them, but I felt I had done my bit for JKH and it was an interesting challenge to take Hemas public.

I resigned from the JKH Board to join Hemas. The JKH Directors continued as friends and still Susantha very kindly invites me for dinner from time to time.

Investing in Serendib and joining Hemas

Even during the dark days of the war, when tourist arrivals were poor, I believed that in the long-term tourism would be our oil well. To get closer to the industry I wanted to make an investment in a hotel company. Through a mutual friend I met Abbas Esufally and with his help bought the shares of a Director of Serendib Hotels, who was retiring. It was a relatively modest investment but it got me to the top three non-corporate individual shareholders and I was invited to join the Board. I also invested in the quoted Serendib subsidiary companies Sigiriya and Dolphin.

This gave me a good and continuous rolling insight of the tourism industry. I had always been interested in tourism as a good industry for developing countries. This close-up picture of the hotel industry was helpful in developing my knowledge. I was happy to be on the Board.

Serendib was a fairly unstructured business and I endeavoured to help the management develop relevant business processes. I encouraged the management to develop Serendib as a brand and to leverage the Bawa connection.

It was one of Geoffrey Bawa’s early hotels. It had been heavily influenced by 18th century Dutch architecture. The facade viewed from the beach had a remarkable resemblance to the well-preserved Dutch building in Pettah.

The hotel put together a Bawa room to illustrate and leverage the Bawa link. After Srilal Miththapala, the enthusiastic Manager in the early phase, we had Ranil De Silva, a very experienced modern Manager. I was happy to be an active and involved member of the Board, and saw the hotel expanding both physically and in quality and as a shareholder I was pleased that it also was a steady, profitable hotel.

Abbas Esufally, one of the four major shareholders of Hemas Holdings, was Chairman of the Company. He was perceptive of the issues relating to tourism, was a pleasure to work with, and I enjoyed working with him, for many years.

The Minor Group, a big international hotel group with a base in Thailand, had expressed an interest in some form of collaboration. This proved to be a distraction. The Serendib management was heavily involved in building its Anantara property in Kalutara and the Hemas Minor Joint Venture hotel in Tangalle. The joint venture with Minor never happened and Serendib had to consider a life without Minor. This was a new strategic challenge. I did not stand for re-election.

Hemas was owned by four Esufally cousins. Each managed a piece of the business, with freedom to do as they pleased. They had the same cars and same salary and lived down the same road. A high comfort zone.

My role was to explain the process, advantages and consequences of becoming a public company. The big concern was whether the public would buy the shares of a firm in Bristol Street owned by four Borah cousins. I was convinced that a properly-constructed public offering would succeed.

The daunting question for them was whether to remain private in their comfort zone or to release the value by going public and accepting all the restrictions on freedom that came with it. The prospect of becoming billionaires won. But it proved to be a hard struggle to get them to keep their part of the bargain and accept the restrictions on their freedom as a public quoted company. I agreed to come on the Board and lend my name to the public issue and the financial advisers were confident that the issue would be fully subscribed. It was.

Public company

It had three Independent Directors, and I was the Independent Chairman. I tried to perform two roles. To give them the benefit of my management experience and be a mentor to develop the management skills of the company and as Chairman to establish the good governance practices of a public company and create the corporate structures that would help optimize shareholder value.

The first problem

To complacently accept less than the best skills available was not compatible with the obligations of a Chairman, the custodian of the public shareholders’ interests. This created problems. The four family shareholders were all intelligent and educated. In the management structure of any good company, that only gets one to the starting gate. What they all, including Hussein, lacked was good business experience gained by working elsewhere under outstanding managers and a high quality management education.

It was a struggle to get them to accept that they should relinquish the Managing Director type of roles they performed, and to bring in first-class management so as to optimize shareholder value and for them to move to a Non-Executive Chairman type of role.

I can well understand that they would have resented me for pushing them to give up their roles, but probably reluctantly accepted that it was in the best interest of protecting the billions of value they owned in shares. Abbas Esufally was charming and gregarious, looked at it all in a very mature fashion, and took it all in his stride in the interests of developing shareholder value. His only concern was fashioning a useful role when he gave up his executive line job.

The biggest block

Hussein Esufally was the biggest block to creating a proper Board-managed company. Transition from a family firm to public company meant the major roles of managing the business, which were all in Hussein’s hand as the CEO of the family business, had to be vested in the Board headed by the Chairman.

He resented it, but had to accept, for example, that there had to be a Remuneration Committee, an Audit Committee, and that annual plans and investment proposals, etc. had to be approved by the Board. Good governance processes remain cosmetic until you give them teeth, and giving them teeth was not easy.

He saw this as a move of authority from him to me and did not like it, as it affected his ego. His reaction was to endeavour to diminish the image of the Chairman. He did not provide the Chairman with an office or a secretary, let alone a company car or entertainment allowance. When I insisted on an office, he gave me a little cubicle behind a secretary.

This undermined my ability to interact with the senior management as I had no proper venue to meet them and it was not in keeping with the image of a chairman of a public company to ask managers to meet the Chairman in his shoebox! When he had decided that he would be the next chairman, a grand office was created. I was like a shadow hovering relentlessly, pursing the reduction of his powers and creating a proper Board-managed public company.

Snakes and ladders

I thought that over the years I had convinced the family that the best method of protecting their wealth was to be a proper public company with an independent chairman and an experienced management team with a good track record managing it.

Steadily over the years we climbed up the ladder, rung by rung. I thought I had convinced them that the two sacred pillars of a good public company were an independent chairman and an excellent and experienced CEO.

When it was time for me to retire, sadly both these pillars were ignored. It was case of whizzing down a snake at the end. Hussein had decided to be Chairman. An end to independent chairmen at Hemas.

The choice for Chief Executive was Enderby. When I was a Director of CDC Plc in the UK, Donald Peck was Managing Director South Asia and Steven Enderby was a member of his private equity team. Steven Enderby had never managed a business as an executive CEO.

CDC was in private equity operations and Enderby could perhaps use his contacts from private equity days to get some funds to buy Hemas in the market and thereby help the share price. Steven is a friendly, charming and intelligent person but had no general management experience to bring to the party. After a long career of success in my endeavours, this is the one big blot of failure.

Fortunately for shareholders, Hemas had some good people, Malinga Arsakularatne had done an excellent job as Head of Finance. There had been many good marketing men in FMCG. If Hemas was prepared to have a CEO with great potential but no previous CEO experience in a big business, the very talented Kasturi Chellaraja Wilson would have been an excellent choice.

In addition to being appointed, there was also something in the air about Steven Enderby wanting to buy a large block of shares at a discount. I don’t know whether this ever happened. I did not want to be a party to the decisions regarding the Chairman and CEO. I said I must retire from the Board before these decisions were made and did so.I did not leave Hemas with the gratitude of the family but I think it was with their resentment.

Trading in bonds

Dinesh Schaffter wanted my help and guidance on developing a conglomerate of businesses he had put together. I said I would have a good look at his business and see whether I could add value. Ksathriya, as it was called, was managed by a small team of highly-paid managers.

I was appalled by what I saw in the numbers. They had made a number of bad acquisitions and were in the throes of making another, a supermarket chain, which had all the signs of another bad acquisition. Ksathriya was kissing distance away from bankruptcy. The task was not growth but restructuring for survival.

The management team was discontinued. Manjula Mathews, Dinesh’s sister, who also had a financial interest, joined the team to salvage what we could from this business which was in dire straits. This was the beginning of a long association with the Schaffters and their businesses. Ksathriya could not be saved as an ongoing business and all commercial operations dwindled down and were wound up.

Dinesh Schaffter was the eternal entrepreneur and his philosophy was ‘if one failed, look for another’. Ksathriya was reborn as Dunamis. Tucked away within it was a piece of relatively neglected business, which was high risk but interesting. The business called First Capital was a licensed bond trader and could trade in Government securities. So I joined First Capital as a mentor, ended up on the Board, and eventually was Chairman.

Trading in Government securities, to put it very simply, was to buy at the Central Bank auctions with money borrowed from the Banks and sell on at a profit but at very thin margins of profit. It was volume that gave one a meaningful profit, but volume meant high debt. It was a difficult business of predicting trends in interest rates and backing the judgment with high-risk trading.

Good governance was paramount. Processes had to be put in place to ensure good governance of trading and good management and they had to be rigorously enforced. The industry was heavily regulated. Compliance was vital as failure could result in losing the license to trade, which would mean the end of the company.

A compliance team was established but it was necessary for the Board to keep this activity under continuous review. The other area to be managed with utmost care was the management of risk and there was a Risk Management Committee. It was compliance to protect the license and risk to protect the shareholders’ money.

There were the other corporate bells and whistles essential in a public company, like a Remuneration Committee and an Audit Committee, and these were established. Around First Capital, there was another conglomerate developing. Wealth management, investment funds and a stockbroking firm. Good processes were established to facilitate their development.

The Schaffters, Manjula and Dinesh, were delightful people to work with, for many reasons. They were both very bright, there was always a chuckle even when contemplating dire circumstances if things went wrong. Never a risk of rumbling egos. If they had any, they never brought them to work. They always appreciated what I did for them. Whenever I met their father, Chandra Schaffter, he never failed to thank me for helping his children.

The thought of retiring from all work was hovering in my mind. A difficult regulatory development provided the exit. Stringent regulations were introduced about related party transactions. In close-knit conglomerates this was a problem and created the need to unravel them and to create new arrangements that complied with the regulations. At the tail-end of my career I had little appetite to take this on, and I had a good solution.

I had brought two excellent finance people on to the Board, Minette Perera and Nishan Fernando. They had both worked in companies where I was Chairman. Minette at Reckitts and Nishan at SLT. They were appointed to a Related Party Transaction Committee. After watching over it for a few months I knew it was in safe hands, and as I had done my bit for the Schaffters over the years I thought it was in good order not to stand for re-election, and brought the curtain down after a 55-year career.



Features

America at 250: Most unfitting President, Biggest World Cup Tournament

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Messi and Yamal to face each other in Sunday’s World Cup Final

The world’s oldest constitutional democracy turned 250 on the Fourth of July, two weeks ago. It is a rather quirky coincidence that in the 250th year of its largely successful existence, America should be having as its president the most unfitting person in history, and that in keeping with the American trait for mixing serious purposes with fun and play, it should also be hosting perhaps the largest edition of the World Cup Football Tournament. The triple coincidence – the anniversary, Trump presidency and the World Cup – is not without some meaning.

The essence of the Trump presidency has been to recast America in the mould of Trump’s own vulgar and outlandish presuppositions about who belongs in America and what the rest of the world owes to America. Internal exclusions and external isolation have always been a part of American history, but Trump’s project has been to make them America’s sole and permanent purpose. Make America great again by making it more intolerant and more imperfect, as opposed to pursuing the country’s founding purpose of striving towards a “more perfect union.”

Trump is also giving a new meaning to America’s exceptional isolationism by slashing immigration, deporting American residents whom he and his Maga cabal don’t like for the vilest of reasons, withdrawing from global agencies that America created and closing down American agencies providing global services, imposing tariffs on every country and deeming them as payment for America’s past generosity under weak presidents, and threatening neighbours with annexation while militarily attacking others.

2007: Lionel Messi holding baby Lamine Yamal

He got his nose bloodied after listening to Netanyahu and starting a fight with Iran, made a fool of himself by first announcing that he will provide safe passage to ships through the Strait of Hormuz and charge them 20% of their cargo value, and immediately withdrawing it after being told that it was a lamebrained and impractical idea. The Iranian Foreign Minister tweeted that it is a good approach but 20% is too high! The reality is that Iran has effectively closed the strait again, after Trump said his ceasefire with Iran is over, and there is nothing the might of America can do about it – thanks solely to Trump.

The world, not to mention America, are back to where it was soon after February 28. And Trump is back to February 28, with more attacks on Iran while telling Israel to keep out of it and hoping that Iran will soon come to the table. The Iranian regime is insisting that it is Trump and not Iran who will have to blink first again. For the rest of the world and the people of America, fuel and fertilizer prices are again rising along with the prices of goods and services that depend on them.

Meanwhile, the Fourth of July marking America’s 250th Anniversary of American independence has come and gone. Every year, Americans cheer and celebrate the Fourth of July as a civic festival in their local communities. Families take their children to Washington, Philadelphia, Gettysburg and other historical sites to learn and appreciate their history. The state hardly gets involved and there are no military parades or flights of fighter jets. Trump changed it last year by holding a military parade in Washington but it did not excite anyone. The army had to go to extraordinary lengths to protect the city roads from cracking up while parading its massive tanks. This year Trump’s efforts to turn the 250th anniversary celebration into a personal vanity affair spectacularly backfired and what was becoming a national damp squib. Not so ironically, it was rescued by the 2026 World Cup tournament that began on Thursday, June 11 and will end on Sunday, July 19.

World Cup Down to the Wire

The 23rd FIFA World Cup hosted by America, Mexico and Canada with matches played in 16 cities – 11 in the US, three in Mexico and two in Canada – became a significant occasion for the US. It provided an antidote to Trump’s vain and unsuccessful usurpation of the country’s 250th anniversary, even as it became an occasion to show the world that there is still much more likeable about America in spite of all the ugly MAGA makeover that Trump has been giving it from the White House.

What is unique about America is that it is the first and the only immigrant country to become a superpower in world history. An open door country with a melting pot ethos, America has consistently struggled at every stage of its evolution to defy the homogeneity of the privileged, and to celebrate across-the-board heterogeneity in every aspect of the human condition. If the purpose of Trump’s presidency has been to break this arc of American history, the World Cup became an occasion to demonstrate that the arc will continue in spite of Trump.

The World Cup was an eye opener to both resident Americans and visiting football worshippers. Except for the Olympics sporting events, competitive sports in America are dominated by (American) Football, Baseball, Basketball and (Ice) Hockey, and the competitions are all limited to American teams along with some Canadian teams especially in Hockey. The extent of any international connection is limited to allowing players from Central America and Japan for Baseball, and from Canada and Eastern Europe for Hockey. In other words, American notions of exclusivity and self-sufficiency seamlessly extend to the world of sports from the universe of politics and economics.

The arrival of the World Cup, 32 years after America hosted its first and only World Cup in 1994, was an eye opener to American sports fans and the general public. This was international sports at their doorstep and an occasion to live through the experience of witnessing the world’s best exponents of the game fiercely displaying their talents in friendly competitions. The visiting fans who thronged the games brought life and diversity and retail spin offs to the cities where the games were played. The visitors to a person, both players and fans, were enthralled by the magnificence of America’s sporting facilities and the range of amusement and entertainment the host cities offered.

The tournament also became a smorgasbord of different nationalisms from around the world but manifesting pride and passion in support of national football teams and not boastful belligerence about national militaries. The teams were also more equal on the pitch than their governments are at the UN podium. The better teams of the day won in the end but every team made each game as competitive as it could. Small countries from West Asia, Africa and little Atlantic islands went boot-to-boot with European and South American giants and kept everyone guessing until the final whistle. The really big Asian countries – China, India, Indonesia etc. – could not qualify for admission, while Asia’s two industrial giants – Japan and South Korea – acquitted themselves well even though they were unlucky not to go beyond the group stage.

The team that America fielded should not have been allowed to represent the country based on Trump’s executive negation of all DEI (Diversity, Equity and Inclusion) programs in government and in federal hiring. But it did and the US team would have made the 1960s promoters of cross-racial ‘rainbow’ alliances proud. Similar rainbow teams have become the norm of almost all West European countries and England.

Players of colour have become superstars in western football teams and have quite clearly internalized natal nationalism as opposed to being assimilated by them. They are all descendants of birthright citizens of the old empires, a legal tradition that is more universal and anterior to the abolition of slavery and the 14th Amendment in the US, as Chief Justice John Roberts reminded the Trump Administration in overturning its executive order to end the recognition of birthright citizenship in America. A practice that is shared by three dozen countries.

The US Team at the World Cup began as a promising outfit playing with flair and freewheeling style and could have gone as far as the Quarter Finals to play Spain. The team was undone prematurely by Trump’s sleazy intervention with FIFA bosses to suspend the Red Card penalty ban of a US player, Folarin Balogun, for a foul he had committed in an earlier match. Trump’s role and the penalty suspension created a public uproar and in the upshot an inspired Belgium trounced the US whose players performed very poorly perhaps under the weight of the embarrassment that their President had inflicted on them.

The World Cup tournament itself is now down to the final match, the 104th of the tournament, on Sunday, July 19th, between the reigning World Cup champions, Argentina, and Spain, the current Euro Cup holders. The match for the Third Place will be played on Saturday (July 18), between France who lost 0-2 to Spain in a surprisingly one-sided game, and England who went down in a heartbreaking 1-2 defeat to Argentina after leading 1-0 up till five minutes before the final whistle.

The French were the tournament’s cracking team till they came up against Spain who had been belabouring until then. The English team had bestirred all of England back home with their gritty win against Mexico in its national stadium full of 85,000 spectators, but once again came up short in the penultimate game.

The final between Argentina and Spain will feature the 39 year old Argentinian maestro, Lionel Messi, looking to win his second World Cup, and the 19 year old Spanish prodigy, Lamine Yamal. The football internet is abuzz with a 2007 photograph showing then 20 year old Messi carrying Yamal as an infant during a photo session in Barcelona, Spain, where Messi played club football. On Sunday, in New York/New Jersey, they will face each other in a spirited encounter for the biggest prize in sports.

by Rajan Philips

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Features

Two memorable excerpts from a former SLAF commander’s memoir

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Prime Minister Magaret Thatcher at opening of the Victoria dam. President Jayewardene, Mahaweli Minister Gamini Dissanayake and Finance Minister Ronnie de Mel are also in the picture

These two excerpts from the forthcoming book, To Survive As One Nation, One People by Air Chief Marshal Oliver Ranasinghe. A Retired Commander of the Sri Lanka Airforce makes interesting reading. The first is of a sudden demand on the SLAF for emergency air support for the besieged Jaffna Fort when the only available helicopters were being prepared for a VVIP flight for UK PM Margaret Thatcher and her husband, Mark.

The second deals with ferying PM Rajiv Gandhi and his wife Sonia to Katunayake after a naval rating had hit Gandhi with a rifle butt.

In April 1985, the UK’s first female prime minister visited Sri Lanka to ceremonially declare open the Victoria Dam and Power Station built with aid under the patronage of Queen Elizabeth II. The completion of the project was a significant milestone for the Accelerated Mahaweli Development Programme, with the power station having an installed capacity of 210 MW. Two helicopters were stationed at Air Force Headquarters premises to fly the VVIPs at 6:30 a.m. on 12 April to Victoria Dam. I was Commanding Officer of the Helicopter Wing and assigned to fly Prime Minister Margaret Thatcher and her husband.

However, at around noon on the day before the flight, I got a desperate call from the Joint Operations Command (JOC) requesting that 250 troops be airlifted to the Jaffna Fort immediately, since “hot intelligence” had informed that the enemy had planned to attack the fort that night.

I did not have any helis in the Wing as all had been deployed throughout the North and East. The only other two serviceable helis were in the VVIP security cordon, standing by to fly Prime Minister Thatcher and the other VVIPs the next morning. According to VVIP flying procedures, the helis are kept for 48 hours before the flight within a security cordon which is well-guarded by guards and air dogs. No one is allowed to go witin the security cordon without the Commanding Officer’s approval.

I had to take a quick decision about whether to drop the troops using the two helis from the cordon and run the risk of having no heli to fly Prime Minister Thatcher the next morning. The alternative was to say “No,” to the Army and take the risk of losing hundreds of soldiers at the front, facing a humiliating defeat, loss of prestige, morale and losing the Jaffna Fort, which was the Army’s pride.

If the latter happened, our conscience would be inconsolable even today. When we were fighting the battle, we were one unit: Army, Navy, Air Force and Police. The Air Force was always there. We never said no. So, I took the decision to fly immediately to Jaffna to carry out the task using the two VVIP helis. I was taking a huge risk, jeopardizing my career in the Air Force, by disregarding the standing orders and removing the two helis from the VVIP cordon.

By 1:00 p.m., we took off from Katunayake for Jaffna, using the two VVIP helis without Air Force Headquarters approval. I was captaining one heli with Flight Lieutenant Lasantha Waidyaratne as my co-pilot. (He was the pilot who, a long time later on, landed a heli at Jaffna Fort in the impossible task code-named Operation Eagle.) Flight Lieutenant Tennyson Gunawardena was flying the other heli as captain. I had to fly as we did not have any pilots to spare.

From the Palaly airport, we flew with twenty-two passengers without seats, keeping within the maximum all-up weight, and headed into the Jaffna Fort, approaching with the wind and not headwind as usual, avoiding enemy guns.

By 5:30 p.m., Tennyson called me on the receiver transmitter unit and said, “Sir, it is raining heavily in Katunayake, and we have to go in bad weather in the night back to Katunayake. So can I leave now?” I said, “Okay,” and ensured the heli was made ready for the VVIP the next morning. In the meantime, I kept flying the balance troops.

I did not get down at all from the heli and refuelling, too, was done whilst I was sitting in the pilot’s seat. The Brigadier-in-Charge in Jaffna came up to the heli very late in the evening and told me that, if I couldn’t drop all troops that night, to do the balance first thing in the morning. I said, “No, I will drop all tonight as I have to fly back to Katunayake for a very important task.”

We dropped all 250 troops into the Jaffna Fort and, after refuelling at Palaly, left at around 10:00 p.m. to fly back to Katunayake. However, we got caught to heavy rain on the stretch from North of Mannar to Katunayake. The weather was so bad that we had to request radar assistance to steer to Katunayake. However, I decided to disregard radar advice and told my co-pilot to follow the coastline, just to be clear of obstacles such as high-tension wires. Helicopters do not fly in rainy weather, let alone bad weather, and definitely not at night, but we had no choice.

Lasantha, my co-pilot, swears that he has not done a bad weather flight of that nature, either before or since, in his flying career. In fact, he says that he matured as a pilot during the last hours of that flight!

At around midnight, we landed at Katunayake where the crew was ready to take the heli and clean it to VVIP standard, which they did throughout the night. I was relieved and happy that I could return to Katunayake the same night.

The next morning, we positioned the two helis by 6:30 a.m. at Air Force Headquarters premises to fly the VVIP. Prime Minister Margaret Thatcher and her husband, Mr.Denis Thatcher, had a safe and comfortable flight to Victoria and back. In fact, Mrs.Thatcher was fast asleep when we touched down in Colombo!

As the Commanding Officer of the No.4 Helicopter Squadron, I risked my life and career because I did not want the Jaffna Fort to fall into the enemy’s hands and lose Army lives. Also, I did not want to let down the VVIP and spoil the image of the Sri Lanka Air Force. If anything had gone wrong, obviously I would have been “thrown” in the sea. I believe such life and death situations reveal the inborn/emerging leadership potential of individuals.

This excerpt deals with flying Prime Minister Rajiv Gandhi and his wife, Sonia, to Katunayake after a naval rating on ab honour guard struck Gandhi with rifle butt.

In July 1987, I was out of the Helicopter Squadron and serving as Base Commander—Anuradhapura. The Commander of the Air Force called me one day and asked me whether I was still current on helis, and I said, “Yes.” He said, “I am sending a Bell 214 for you to do some flying training.” The next day, the heli arrived at Anuradhapura, and I got back into swing doing some flying training.

After two days, I was told to come to Katunayake to do a flight. I was told that I had to fly the visiting Indian Prime Minister, Rajiv Gandhi, from the Bandaranaike International Airport (BIA) to Galle Face and back. He was coming to sign the much-talked about “peace accord.” The Indian Prime Minister arrived at the BIA, and he was ferried to the Galle Face green, from where he was taken in a motorcade to President’s House to sign the Indo-Lanka Peace Accord.

Without taking much time, the motorcade returned to the Galle Face green. There was no panic. Rajiv Gandhi was smiling, but Sonia Gandhi helped Rajiv get in first, to the inner seat of the helicopter, and Sonia sat next to the window. If not for that, everything was normal.

I started up, switched on the VHF radio and contacted the Air Force Operations Room for take-off clearance. They told me that at the Navy’s Guard of Honour parade, there had been an incident targeting Rajiv Gandhi. That played havoc in my mind. I had to think that whoever planned and failed would have a “plan B,” and that would be to target the helicopter. Then I realized that, if so, both Rajiv Gandhi’s life and mine would be destroyed by “plan B.” That was my thinking. I had to save this VVIP, our state visitor. To do that, I had to make decisions on my own.

There was no one to tell me what to do. So, I took off in the most unexpected direction and avoided the usual route and followed a different route to BIA, whilst all the time being alert. Coming over BIA, I disregarded the usual approach procedure to the surprise of the Air Traffic Controllers and approached from the wrong direction and landed, but not in the designated landing place, to avoid a possible sniper or RPG attack.

The VVIP got off and walked away to the awaiting Indian Air Force aircraft. That relieved me of the tension of delivering the “precious cargo” in one piece.

(The book is distributed by the Vijitha Yapa Bookshop)

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Business

‘Giving up was never an option’: The fisherman  who fought back after losing millions in SL

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Seamax factory at Dickowita Harbour

 Spanish Israeli entrepreneur Simon Max Astandoust, a fourth-generation member of the renowned Astan fishing family, has endured years of legal battles, business setbacks and the loss of millions of dollars after investing in Sri Lanka’s fishing industry. Yet, despite the challenges, he has chosen to stay and rebuild.

 In an interview with the Sunday Island, the founder and CEO of Seamax Ceylon (Pvt) Ltd speaks about his struggle, the restoration of his state-of-the-art factory vessel Astan II, and his plans to introduce cutting-edge seafood technology to Sri Lanka.

 Q: You began operations in Sri Lanka in 2018. What was your original vision and investment?

 A: We started operations in 2018 with an initial investment of around US$1 million. Over time, that investment grew into several million dollars because we believed Sri Lanka had enormous potential in the fishing industry.

 My original intention was to develop a project through the Board of Investment (BOI) and introduce new technology to the country. However, the Government at the time encouraged us to work directly with it instead. We believed that this partnership would help us move forward faster and create something unique for Sri Lanka.

Overhauled Astan II

 Our goal was to operate within the harbour and establish a modern fishing operation centred around advanced technology and sustainable seafood processing.

 Q: What challenges did you face after starting operations?

 A: Around eight to 18 months after we began our investment, COVID-19 hit. The pandemic created enormous difficulties. In countries such as Spain and the United States, governments provided financial support to help businesses survive. Here, the Government itself was facing a difficult economic situation and was unable to provide similar assistance.

 Initially, we were told that there would be a grace period and that we would not be pressured for payments as long as we maintained our workforce and kept the operation alive. But later, that understanding changed, and demands for payments began despite the fact that we had a 15-year agreement.

 That was the beginning of the major conflict.

 Q: How did the change of Government affect your operations?

A: When a new Government came into power, the 15-year agreement signed with the previous administration was not recognized. The factory was closed and legal action was initiated against us.

 This was extremely difficult because we had invested heavily based on a long-term agreement. We had built infrastructure, brought in technology and created employment opportunities.

 During this period, while the vessel was caught up in legal disputes, a group of people attempted to take control of the ship. One of the most painful experiences was that some lawyers who had been working for us changed sides and supported those attempting to take the vessel.

Simon Max Astandoust

 The legal battle continued for years and only concluded in 2025.

 Q: Your vessel, Astan II, is central to your investment. What happened to it during this period?

 A:  Astan II is not just a fishing vessel. It is a huge factory vessel with a complete processing facility inside. It was designed to bring a completely new level of technology to Sri Lanka’s fishing industry.

 Unfortunately, because it remained idle during the legal proceedings, it suffered significant damage. Ships cannot simply sit in a harbour for months or years without proper operation and maintenance. The Sri Lankan weather conditions are particularly harsh on vessels.

The vessel deteriorated badly, but after we regained control, we decided to completely restore it. It was overhauled.

 Q: How much did the restoration cost and what work was involved?

 A:  The restoration cost approximately US$1.5 million and took about one year, beginning in 2025. The vessel was almost a complete rebuild. One of the biggest technical challenges was repairing the three generators. Because the harbour did not provide electricity, these generators had been running continuously to maintain the vessel. Over time, this caused significant wear and tear.

 Finding replacement parts was another major challenge. Many of these parts are not imported into Sri Lanka, so every component had to be sourced from different countries and brought in individually.

 A team of around 14 to 20 people worked on the restoration, including a Sri Lankan chief engineer and local professional deck crew. Their expertise and dedication were extremely important.

 Today, the vessel is in brand-new condition.

 Q: You mentioned that the absence of diplomatic representation made your struggle more difficult. Why?

 A: I hold Spanish and Israeli citizenship, and neither Spain nor Israel has an embassy in Sri Lanka. Normally, when a foreign investor faces serious difficulties, an ambassador can engage with authorities and help protect the investor’s interests.

 In my case, I had to face everything alone. I had to deal directly with government institutions and the legal system through my lawyers. Having diplomatic support would have made a significant difference. But ultimately, I had to rely on the courts and the legal process.

 Fortunately, the maritime judges understood the complexity of the situation and the importance of maritime law. Their fair approach restored some of my confidence.

 Q: Your vessel uses unique -70°C “Ultra-Fresh” technology. Can you explain how it works?

 A:  This is one of the most exciting parts of our project. The technology comes from Japan and is only about two years old. Traditional freezing methods often affect the quality of fish because the freezing process is slower and damages the texture. This technology works differently. It uses a glazing process where the fish is frozen from the outside, creating a protective layer.

Within approximately two hours, the fish is completely frozen. This process eliminates bacteria and preserves the quality of the fish.

When the fish is later defrosted using the correct method, it is almost exactly like fresh-caught fish from the ocean. The taste, texture and quality are preserved. At present, nobody else in Sri Lanka is carrying out this type of ultra-fresh freezing technology onboard a fishing vessel.

 Q: What advantage will this technology give Sri Lanka?

 A: Sri Lanka has excellent fishing resources, but we need to move beyond simply catching fish. The future is about value addition, quality control and accessing premium international markets.

With this technology, Sri Lanka can export seafood at a much higher value because customers will receive a product that maintains the quality of freshly caught fish.

 This is not just about one company. It is about introducing a new concept to the country’s fishing industry.

 Q: After everything you have experienced, why did you decide to continue investing in Sri Lanka?

 A: I come from a family of fishermen. This is my fourth generation, and my son represents the fifth generation. Fishermen are not people who give up easily. The sea teaches you resilience. You face storms, difficulties and uncertainty, but you continue. Of course, there were moments when I lost faith. Losing millions of dollars and spending years in court is not easy for anyone.

But eventually, the justice system gave me confidence again. The maritime judges understood the situation and treated the case fairly. That showed me that there are people in Sri Lanka who understand the importance of protecting investment and respecting the law. That is why I decided to continue.

 Many people told me that, despite the difficulties, the Sri Lankan judiciary would ultimately deliver justice. At the time, after years of uncertainty, it was difficult to know what the outcome would be. But in the end, that is exactly what happened. The courts examined the facts and delivered a fair judgment.

 The maritime judges understood the complexity of the situation and the importance of maritime law. Their fair approach restored my confidence—not only in the legal system but also in Sri Lanka itself.

 Q: What are your future plans for Seamax Ceylon?

 A: Our plan is to expand significantly. We intend to bring two or three more large factory vessels to Sri Lanka, along with five local fishing vessels. We also plan to establish a new processing factory near the beach. However, this time we will work through the Board of Investment rather than entering into a direct agreement with the Government.

 The BOI provides a structured framework for investors, and we believe this is the right way forward. My son Sam, who is the CEO of our US-based company, will also return to Sri Lanka to help introduce successful business concepts and support the next stage of development.

 Q: What keeps you motivated after such a difficult journey?

 A:The answer is simple: we do not give up. I come from a family of fishermen. This is my fourth generation, and my son represents the fifth generation. Fishermen understand struggle. You cannot control the ocean, but you learn how to survive. You face storms, difficulties and uncertainty, but you continue moving forward.

 I have lost money, faced difficult times and experienced moments of disappointment. But I never stopped believing in the potential of Sri Lanka. One thing that gave me strength was the faith many people placed in the country’s judiciary. I was repeatedly told that the courts in Sri Lanka would deliver justice, and ultimately that belief was proven right. The maritime judges understood the situation and gave a fair decision based on the law.

That experience reminded me that, despite challenges, Sri Lanka has institutions and people who respect justice. That is why I decided not only to stay but also to invest again.

For me, this is not merely a business project. It is about resilience, trust and proving that when you believe in something, you continue fighting until you succeed.

by Saman Indrajith ✍️

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