Govt likely to take over Sathosa Retail Ltd

by Shirajiv Sirimane

The Ministry of Trade and Commerce is likely to take over the management of the Sathosa Retail Ltd, soon to provide a more efficient service to consumers.

According to the Secretary Ministry of Trade and Commerce, S. Wirithamulla, a discussion in this regard was held yesterday among Prime Minister Mahinda Rajapakse, Minister of Trade and Commerce Jeyaraj Fernandopulle and several other senior ministers.

"The Ministry is likely to take over the management very soon," he said. It is understood that a Cabinet paper in this regard is now being prepared. Director Sathosa Retail Ltd, (SRL) Lakshman De Silva said that the consortium which comprises of Carsons, Arpico and Munchee were in favour of the Ministry taking over the management.

"Infact we have made requests in this regard to the government on many occasions," he said.

In 2004 February the SRL management assessed the companys progress and had requested the government to allow a rights issue to raise Rs. 300 million.

The consortium was to invest Rs. 120 million and the government was to invest Rs. 80 million.

"Sathosa Retail was making around Rs. 110 million and when they took over this was increased to Rs. 360 million" he said. However the turnover has now dropped by over 40 percent as they could not make any new investments holding only 40 percent stakes. Sources also say that around Rs 300 million have to be paid to the SRL suppliers.

The consortium invested Rs. 680 million to own 40 per cent of the shares and take over the management in December 1 2003. The SRL sates that the government should take over the management first and later come to an agreement with regard to compensation for the consortium. "If this is delayed SRL will suffer further losses," he said.

Meanwhile the strike organised by Sathosa workers demanding the takeover of the Sathosa also continued.