Reminiscences

How Harry J’s Sampath Bank acquisition bid failed

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Retired Chairman of Sampath Bank PLC, Managing Director of Commercial Bank of Ceylon PLC, President of the Banks’ Association of Sri Lanka and incumbent Chairman of Kahawatte Plantations PLC, Group Chairman of Tokyo Cement Lanka PLC, Ceylon Tea Marketing Services Ltd and Star Packaging Ltd Edgar Gunatunga reminisces.

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Ravi Ladduwahetty

The duty forecaster at the Meteorological Department’s Bauddhaloka Mawatha complex might have recorded Friday noon’s temperature at 30.3 Degrees Celsius and the Relative Humidity at 85% but retired Sampath Bank Chairman Edgar Gunatunga was seated cool as a cucumber at the lounge of his Keppetipola Mawatha residence, reminiscing an illustrious and elongated banking career spanning a record 55 years.

One incident which has been firmly entrenched in his mind was the most hostile acquisition bid by Sampath Bank by business tycoon Harry Jayawardena through the Hatton National Bank.

“The Central Bank put the lid on Harry’s Sampath acquisition as he had exceeded the stipulated percentages of shares that any individual/corporate could have in a licensed bank,” Edgar told Daily News Business.

“Had the acquisition borne fruition, the running of Sampath Bank would have been extremely arduous with there being no compatibility between the cultures of Sampath and Hatton National Bank where the management process and the staff management would have been totally diametrically opposite, he said, and added that Harry’s nominees might not have studied these aspects when the takeover bid was mulled.

There had been two occasions that Edgar had wanted to retire but the two issues made him stay longer than he had actually wanted.

The first was when Harry’s takeover bid and the latter was when there was a dispute with the Nawaloka Group building at Nawam Mawatha which Sampath acquired for its Head office at Rs. 500 million.

There was a small dispute on what was agreed and what was committed and a question of pricing, he reminisced.

Edgar, an alumnus of St. Benedict’s College, Kotahena, joined the Colombo branch of then UK owned Eastern Bank as a Junior Clerk whose 40 per cent was held by Standard Chartered Bank.

Disillusioned after two years, he left and proceeded to England, the then practice of his family and friends. He joined the Head Office who hired him as a Management Trainee on the understanding that he studies, qualifies and returns to the Colombo office as a Senior Officer. He read for his Banking examinations and returned to Sri Lanka prematurely due to family commitments.

Edgar might be rewriting the record books in the Sri Lankan banking arena. This was one of the few sparse instances where a school-leaver joined a bank as a junior clerk and rose up to be Managing Director while emerging as Deputy Chairman/ CEO and Chairman of another.

It was with obvious pride that he had recently told an old English banker colleague that he had completed 56 uninterrupted years of banking and the friend in turn had vowed that Edgar had merited a listing in the coveted Guinness book of world records.

Rich experiences

Some of the richest experiences that Edgar had were as Jaffna Manager of Commercial Bank, then largest outstation branch. Business was brisk.

He was promoted as Covenanted Officer with powers of Attorney. ( Blue chips such as Aitken Spence have a parallel known as Per Pro, short for Latin term Per Procurentum). One of the hair rising experiences he had was when he broke open the stores of a smuggler to whom the Bank had loaned money, which was later unrecoverable.

The smuggler had escaped to India. Communications was not as developed as now and getting through to the Colombo head office was a nightmare so I had to take this unpalatable decision, he mused.

He was brought to Colombo and was promoted Accountant of the Bank and then Deputy General Manager and Managing Director.

As Accountant, he once ran down Bristol Street and caught a man who cashed a forged cheque and assaulted him.

Forged cheques were a frequent phenomenon then and when I summoned the police, they said: “Congratulations, Mr Gunatunga, you have caught the ring leader.

On retirement from Commercial Bank, he was wanted as the Managing Director of Sampath Bank, which was going through a crisis and a run on the deposits.

He refused any banking appointments, but passionate pleas by the then Governor A.S. Jayawardena and the Sampath Board, he relented. He joined as the Deputy Chairman/ CEO. A morning private daily ran a double column front paged story in a headline in reverse fonts: “Edgar joins Sampath” The market confidence was restored.

He was promoted Chairman succeeding Dunstan De Alwis.

Sampath which had a mere seven branches at the time he joined and with mediocre profits had grown and had over 100 branches and over Rs. One Billion in profits when Edgar retired.

“Sampath had a good set of bankers and a good IT system and all I did was to provide the leadership,” he said.

Hilarious incident

Edgar recalled a hilarious incident while he was at Commercial Bank of Ceylon while he was also simultaneously the President of the Banks’ Association of Sri Lanka.

He had a set of friends whom he described as “naughty” were constantly giving him nuisance calls during the lunch interval. The repetitive cry was: “This is Menikdiwela here, H.E. the President wants to see you in 20 minutes. He rebutted: “Tell your bloody President that Gunatunga is at lunch.

Repeated the fourth time, Edgar was furious. He held on to latch the background voices to nab the culprits. Lo and behold. He could hear President Jayewardene’s voice in the background. Then it transpired that the real caller was W.M.P.B. Menikdiwela, Secretary to the President.

Edgar finished lunch and was at the President’s House in 20 minutes. President Jayewardene on seeing him asked: “Gunatunga, are you after lunch? Edgar sardonically rebutted: “Sir, if I did not have my lunch, I would not have been here.”

The real reason for President Jayewardene summoning Edgar, as it later transpired, was to stop him and his Association members from providing loans to a private newspaper group (name withheld) which was attacking him and his Government. Edgar said: “Sir, I wish you had not made that request of me.” Jayewardene thundered acidly:“ Gunatunga, I will have you sacked in two days.”

To which school did you go to? The President asked in lighter vein. Edgar was pushed into a groove.

Edgar, despite being an old Benedictine, was acutely conscious of President Jayewardene’s awareness of his Sedawatte family connections. Pat came the reply: “Sir, I am old boy of Sedawatte Madya Maha Vidyalaya.

“The entire conversation and the veiled threat were digressed. Jayewardene then talked about the connections between Sedawatte and the Kelaniya temple in which he had family connections. Edgar escaped unscathed.

Later, Edgar was introduced to Jayewardene at a party long after the latter relinquished office. Jayewardene said: “I cannot forget his face as he is the only one who refused me a favour in my 11-year-old Presidency.”

Then it was President Dingiri Banda Wijetunga who had the notorious habit of waking him at 6 am on Sundays to find out how many jobs Edgar had for his Yatinuwara electorate. Edgar rebutted: “Mr. President, Sunday is the only day I sleep till late. Please do not disturb me at this time. Bang. Bang. The phone was slammed in poor President Wijetunga’s ear.

Spanish footwear for export market

The Board of Investment of Sri Lanka (BOI) granted investment approval to ICL Robusta (Pvt) Ltd. for a project to manufacture footwear for the export market.

BOI Board Member Channa Palansuriya signed the agreement on behalf of the BOI and presented the BOI Certificate of Registrations to Zakir Abdi, Director, ICL Robusta (Pvt) Ltd.

ICL Robusta is a joint venture project of Industrial Clothings Limited (ICL), Sri Lanka and Calzados Robusta S.L, Spain. The venture has been set up with the objective of producing high quality safety shoes and uppers in Sri Lanka for international markets, such as the European Union.

The company will produce custom manufactured high quality safety shoes that are need specific. Abdi said that there is a high demand for high quality safety footwear.

The company will provide reliable, cost effective, high quality and scientific footwear solutions under the “Robusta” brand to the international markets with innovative designs. Abdi also said that the safety footwear is comfortable to wear and provides the maximum safety.

Abdi said that industrial workers all around the world face the risk of accidents at the workplace. The shoes made by Calzados Robusta were popular in the European Union since they met high standards of safety.

These shoes have re-enforced toe caps while some models even have a metal plate to safeguard workers who may step on a sharp metal object like a nail.

Industrial Clothings Limited, a BOI enterprise was established in 1979 in Sri Lanka. At present, ICL has a workforce of approximately 900 employees and produces all kinds of gloves, shoe uppers and sleeves exclusively for the global markets. ICL is part of Midas Safety, an international group, having operations in Canada, Pakistan, India, Middle East China and Sri Lanka.

Calzados Robusta, a fully owned private company was set up in 1998 in Spain to produce safety and scientific footwear for the domestic and global markets.

This US $ 2.5 million investment project will generate 460 new direct employment opportunities.

The production plant of company will be in the Katunayake Export Processing. The Directors of the company Zakir Abdi and Sohail Ebrahim signed the agreement on behalf of the company.