Editorial
Delisting Nestle Lanka PLC
Except for perhaps some 6,000 plus Nestle Lanka minority shareholders and stock market participants including retailers, many of them pensioners with time on their hands and not much capital resources to play the market, would have been interested in the recent announcement by Nestle Lanka PLC which has been quoted on the local bourse for 40 years that they plan to delist. But the question arises whether such a decision by a multinational company which has had a global presence for over 150 years and is one of the world’s biggest food brands, is fair to the minority shareholders of their Sri Lanka incorporated company. Nestle boasts it has been present in this country for over a century and the brand is a household name not only here but in many parts of the world. That was a factor that attracted investors to buy its shares when it was first listed on the Colombo bourse. But now, four decades later, they plan to delist.
It must be said in fairness to the company that it has announced that it will be paying a dividend of Rs. 75 a share to its shareholders, probably the biggest ever declared on the Colombo Stock Exchange, prior to its delisting. Analysts and market observers believe that this is a way of paying out all the cash in the company to its present shareholders before it becomes an unquoted subsidiary of its Swiss parent, Nestle SA. Alongside its directors’ delisting proposal, the company has announced its intention to pay Rs. 1,500 per share to the minority which the company says is an “attractive and fair premium.”
But, as a correspondent to a financial daily wrote a few days ago, the mere announcement that the company, subject to regulatory and shareholder approval, will delist is not the end of the story. The directors recommendation can still be rejected by the shareholders, he has noted. This happened twice in recent times. First, the quoted Bank of Ceylon subsidiary, Property Development PLC (previously PDL) that owns the banks headquarters building, and AIA, the insurance multinational were rejected by minority shareholders on a ‘one man one vote principle’ against ‘one share one vote’ which generally happens where members are polled at company meetings. In AIA’s case, a price of Rs. 2,500 a share against an original exit offer of Rs. 1,000 was eventually paid.
The delisting of PDL was in limbo for as long as five years after the proposal was first announced. In the case of that company, it ultimately delisted by paying Rs. 183 per share, up 40% from Rs. 130 offered in 2018. The PDL share, of course, did not enjoy the capital appreciation that the Nestle share did, nor did it pay very high dividends like the latter. Finally PDL itself, and not the Bank of Ceylon – its predominant shareholder – bought out the minority.
Although Nestle was unable to pay dividends to its shareholders in the early years as a listed company, investors who were patient were delighted to see in later years capital appreciation of their shares and dividends that were among the highest declared by companies listed on the CSE. The company also did not make a great success of its spray drying milk powder project, something much needed by the country which has long been unable to make a dent in the import demand for this product. Nestomalt, Maggi, coconut milk powder etc. are Nestle products that have made their mark. Coconut milk powder has done very well in export markets. The company’s contribution to local dairy development is also not inconsiderable and its presence in the country has undoubtedly been for Sri Lanka’s benefit. It says it will maintain its presence here and development focus. But all things considered, remaining listed in Colombo and permitting nationals to have an ownership stake, though small, in the company would be considered desirable by many.
Around 2021, Nestle Lanka’s parent began to buy shares available on the market, a big block of slightly under 300,000 shares done at Rs. 1,200 a share. Some market participants, sensing or speculating of a delisting down the road began to focus on the share but acquiring quantity was difficult due to unavailability and the price per share being also high. So trading opportunities were limited.
Nestle has now announced that an Extraordinary General Meeting will be held in Colombo to consider the delisting resolution. It needs no rocket science to forecast that the company with over 6,000 minority shareholders, over 5,000 of them holding between one to one thousand shares, it will be possible to outvote the resolution on the ‘one shareholder, one vote’ principle. Given the experience of PDL and AIA, it is most likely that an effort will be made to force up the exit offer price. Other than for Nestle SA, the parent, no shareholder on the register holds more than one percent of the company. But institutions like the Sri Lanka Insurance Corporation, EPF and foreign and local funds are among the minority. Whether they would be satisfied with the exit offer or join the majority to up the ante remains to be seen.
Editorial
Misplaced priorities
Sri Lanka has a very ‘promising’ government and a perennially protesting Opposition. The government makes various promises, which are like piecrusts made to be broken. The Opposition in a perpetual state of agitation bursts into protests at the drop of a hat. The two sides have been clashing in Parliament instead of sinking their political differences and cooperating at least in the aftermath of a disaster.
The Opposition has requested Speaker Dr. Jagath Wickramaratne to appoint a Parliamentary Select Committee (PSC) to probe the government’s alleged failure to mitigate the impact of Cyclone Ditwah despite repeated warnings issued by the Meteorology Department and the Irrigation Department. The government is determined to avoid a fate similar to that which befell the Yahapalana government following the Easter Sunday terror attacks, which became the undoing of that dysfunctional regime. It is therefore very unlikely to meet the Opposition’s demand at issue. Even if it agrees to appoint a PSC to probe its own alleged lapses, by any chance, it will not allow an Opposition MP to chair the committee and will go all out to frustrate its rivals’ efforts to ruin its political future.
Interestingly, some of the key Opposition members are former Yahapalana MPs who sought to derail a PSC probe into the 2015 Treasury bond scam. They craftily appointed a member of the JVP, which was a Yahapalana partner in all but name, as the Chairman of that PSC, and incorporated a slew of footnotes into the committee report in a bid to dilute it.
In this country, PSCs rarely help get to the bottom of the issues they probe. The PSC on the Treasury bond scam went out of its way to clear the then Prime Minister Ranil Wickremesinghe’s name, and helped the UNP scapegoat former Central Bank Governor Arjuna Mahendran and throw him to the wolves. In 2012, Mahinda Rajapaksa government turned a PSC probe into a witch-hunt against then Chief Justice Dr. Shirani Bandaranayake, who was subsequently wrongfully impeached. The PSC that investigated the Easter Terror attacks (2019) gathered a lot of valuable information but its findings, conclusions and recommendations were tainted by a glaring political bias.
Going by the government’s determined bid to let its MP Asoka Ranwala off the hook, following a road accident, how ruthless the JVP-led NPP will be in warding off threats to its political survival is not difficult to imagine. The Opposition can go on shouting until it is blue in the face but it will not be able to have the government’s alleged failure to heed disaster warnings and save lives investigated properly as long as the JVP/NPP is in power.
What we are witnessing on the political front, especially in Parliament, is like a drunken brawl at a funeral. The government and the Opposition are fighting while the country is mourning those who perished in recent floods and landslides.
What the political parties represented in Parliament ought to do at this juncture is to get their priorities right. They must stop clashing and make a concerted effort to carry out post-disaster rebuilding operations and strengthening the economy. They must not lose sight of the rapid depreciation of the rupee, and the disconcerting forecasts of an economic slowdown. The much-advertised revenue bubble, created by an unprecedented increase in vehicle imports, is about to burst, and the possibility of the country having a rupee crisis to contend with again cannot be ruled out. Foreign reserve targets are far from achieved, and there is a pressing need to boost the forex inflow and ensure that the country will be able to honour its pledge to resume foreign debt repayment in 2028.
All political parties have done precious little for the disaster victims. They have been only visiting the welfare centres and distributing relief materials collected from the considerate public. They ought to engage in post-disaster rebuilding actively. Reconstruction is a labour-intensive task. The self-righteous political leaders should mobilise their community level organisation for post-disaster rebuilding. Sadly, they have not even helped clean flood-hit houses.
Editorial
Cops as whipping boys?
Saturday 20th December, 2025
Disciplinary action has reportedly been taken against several police officers for their alleged failure to conduct a proper investigation into a recent accident caused by NPP MP Asoka Ranwala in Sapugaskanda. This move, we believe, has the trappings of a diversionary tactic. The police would have incurred the wrath of the government if they had conducted a breathalyzer test on Ranwala and produced him before a Judicial Medical Officer immediately after the crash where an infant, his mother and grandmother were injured.
Ranwala was subjected to a blood alcohol test more than 12 hours after the accident, according to media reports. The police would not have dragged their feet of their own volition. They were obviously made to do what they did. The law applies equally only to ordinary people. Will the police top brass explain why no disciplinary action was taken against the police officers who unashamedly sided with a group of JVP members involved in grabbing an office of the Frontline Socialist Party (FSP) in Yakkala in September 2025. After turning a blind eye to that blatant transgression, the police provided security to the JVP members who were forcibly occupying the FSP office. Thankfully, a judicial intervention made them leave the place. The current rulers claim they have not placed themselves above the law, unlike their predecessors. A wag says they have placed the law below them instead!
Having made a mockery of its much-advertised commitment to upholding the rule of law by intervening to prevent Ranwala from undergoing an alcohol test immediately after the aforesaid accident, the government is making attempts at face-saving. Curiously, blood samples obtained from Ranwala have been sent to the Government Analyst for testing! The government seems to have a very low opinion of the intelligence of the public, who voted for it overwhelmingly, expecting a ‘system change’.
It is being argued in some quarters that the disciplinary inquiry against the police officers has been scripted, and the charges against them will be dropped when the issue fizzles out. This argument is not without some merit, but there is a possibility of the government going to the extent of trying to clear its name at the expense of the police officers concerned if push comes to shove.
Successive governments have scapegoated police personnel and other state employees to safeguard their interests, and the incumbent administration is no exception; it has already sought to shift the blame for its failure to mitigate the impact of Cyclone Ditwah to the Meteorological Department, which, it has claimed, did not warn it about the extreme weather events fairly in advance. Opposition Leader Sajith Premadasa told Parliament on Thursday that the government had muzzled some senior officials of the Meteorological Department.
Some leaders of the incumbent government are bound to face legal action for their commissions and omissions when they lose power, and the state officials pandering to their whims and fancies will have to do likewise.
The public officials who are at the beck and call of politicians and carry out illegal orders should realise that they run the risk of being left without anyone to turn to in case they have to face legal action for their transgressions. Their ruthlessly self-seeking political masters will not scruple to sacrifice them.
Editorial
Disaster relief mired in dirty politics
Friday 19th December, 2025
Opposition Leader Sajith Premadasa has accused the government of interfering with the ongoing disaster relief programmes. Speaking in Parliament, on Thursday, he produced what he described as documentary proof to support his claim that disaster victims were required to have their applications for compensation endorsed by the heads of the Prajashakthi committees controlled by the JVP apparatchiks. Several other Opposition MPs have levelled the same allegation against the government in Parliament.
Two trade unions representing the Grama Niladharis have complained of political interference with their work, and even threatened to pull out of the disaster relief programmes unless they are allowed to carry out their duties and functions, free from political pressure.
Sri Lanka United Grama Niladhari Association (SLUGNA) President Nandana Ranasinghe told the media on 08 December that JVP/NPP politicians and their supporters were meddling with the disaster relief programmes at all levels and even obstructing the Grama Niladharis (GNs). He claimed that the political authority had sent letters to the District and Divisional Secretaries, directing them to appoint JVP/NPP members to the state-run welfare centres. SLUGNA Secretary Jagath Chandralal said state officials had been directed to obtain approval from the government members of the Prajashakthi committees for carrying out relief work. A few days later, addressing the media, Convenor of the Sri Lanka Grama Niladhari Association Sumith Kodikara also made a number of similar allegations. He said the NPP politicians were arbitrarily helping their supporters obtain Rs. 25,000 each as compensation. He stressed that only the disaster victims had to be paid compensation, and never had disaster relief programmes been politicised in that manner. These allegations are shocking enough to warrant probes, as we said in a previous comment.
Initially, the government denied the involvement of its Prajashakthi members in the process of selecting disaster relief beneficiaries, but now it allows them to work alongside state officials openly. This is an instance of the arrogance of power, which became the undoing of several previous governments, especially the ones led by the UNP and the SLPP. Minister K. D. Lal Kantha has gone on record as claiming that the Prajashakthi functionaries too should have a say in relief provision!
Funds the government is distributing among disaster victims belong to the state, and therefore no political party must be allowed to influence or control their disbursement. One can argue that it is prima facie unlawful for anyone other than authorised public officials to get involved in the process of distributing state funds as disaster relief. The Opposition should find out whether there is any legal provision for the involvement of the Prajashakthi functionaries in relief distribution or whether they are committing a transgression.
The government is apparently labouring under the mistaken belief that it can use disaster relief to shore up its approval rating as well as electoral prospects in view of the next election––the Provincial Council polls which it is coming under increasing pressure to hold next year. Political interference with disaster relief only exasperates the public beyond measure. A large number of disaster victims have held protests in several areas, claiming that they have been overlooked.
The JVP/NPP, which came to power promising to depoliticise the state institutions and revitalise the public service, should be ashamed of having stooped so low as to politicise the process of providing disaster relief. Politicians have a sense of shame only when they are out of power.
If the JVP/NPP leaders are wise, they will learn from the predicament of the Rajapaksas, who had to pay a heavy price for testing the patience of the public. The latter had to head for the hills with angry people in close pursuit. Now that the people have successfully got rid of a bunch of failed rulers, they may take to the streets again if their patience runs out. The government would do well to follow the established procedures in carrying out disaster relief programmes, without subjugating them to its political agenda and undermining their integrity.
-
Midweek Review4 days agoHow massive Akuregoda defence complex was built with proceeds from sale of Galle Face land to Shangri-La
-
News3 days agoPope fires broadside: ‘The Holy See won’t be a silent bystander to the grave disparities, injustices, and fundamental human rights violations’
-
News3 days agoPakistan hands over 200 tonnes of humanitarian aid to Lanka
-
News4 days agoBurnt elephant dies after delayed rescue; activists demand arrests
-
Editorial4 days agoColombo Port facing strategic neglect
-
News2 days agoArmy engineers set up new Nayaru emergency bridge
-
Business2 days agoUnlocking Sri Lanka’s hidden wealth: A $2 billion mineral opportunity awaits
-
News4 days agoSri Lanka, Romania discuss illegal recruitment, etc.
