Features
A massive mill becomes a mini-city
by Sumi Moonesinghe narrated to Savitri Rodrigo
Believing strongly in the Premadasa ideology of sustainable development long before it became a buzzword, I began working even more closely with him once he was elected President. I had erected a statue in memory of Dr. C W W Kannangara, the Father of Free Education in Sri Lanka, in Matugama. It was Kannangara, as the Minister of Education in the State Council in the 1940s, who introduced extensive and very progressive reforms to the education system which included universal education. I was one who had benefited from his free education policy from my primary and secondary schooling, all the way until earning my degree at a prestigious university. This statue was a debt of gratitude to him.
I had been working on the Trincomalee Development Plan, my pet subject then and now. When the statue was ready in April 1993, I invited President Premadasa to unveil it and also presented him with the Plan. Having read the plan, he summoned me for a meeting on Monday morning at 9 am at his home, Sucharita. Chairing the meeting, he introduced me to everyone in the room and then asked his long-time confidante and Secretary R. Paskaralingam to continue the meeting, while he left to administer his political agenda.
The President’s methodology in running the country was to leave the administration of the Government to the bureaucracy. He never interfered with daily operations. Paskaralingam was the perfect foil for the President’s strategy as, having bees a civil servant all his life, he was well versed in administrative procedures and was known to take immediate decisions.
However, prior to my appointment being made official, President Premadasa was killed on May 1. With the various administrative changes that ensued, I was instead appointed a Director of the Board. The CEO of NDB was Ranjit Fernando – who had been at the bank from its inception in 1979 – and by 1989, had gained a seat on the Board of Directors as well. Into our board formula was added a mix of Government and private sector experts. From the private sector were industry captains S K Wickremesinghe, Sri Nagendra, Hemaka Amarasuriya and Ravi Thambiayah, and Central Banker Manik Nagahawatte and Treasury Secretary Baku Mahadeva representing the Government. As is evident, I was once more the only woman in that male-dominated boardroom.
It was at an NDB Board meeting that I first met Dhammika Perera, who through the years built one of the largest business conglomerates in Sri Lanka, and is one of the richest men in country today. NDB was one of his initial forays into Sri Lanka’s corporate boardroom.
While the IPO had been successful, sometime in 1993, the NDB share dropped to Rs. 45 and Dhammika approached General Manager of Seylan Bank Rohini Nanayakkara with a request for a loan to purchase 10% shareholding in NDB. The loan was granted and as a result, he became NDB’s largest shareholder. However, despite being the single largest shareholder, there was no move to appoint him to the Board. I found this unfair and vociferously campaigned to get him a seat on the NDB Board. It was an uphill task fighting the old boy’s club but I appealed to the principle of being just and fair and Dhammika was appointed to the Board.
When he arrived for his first Board meeting, I went up to the door, welcomed him and gave him a seat next to me. After the meeting, I invited him home for a meal and on the way, relived the time he came to Colombo as a very poor young man. “There were days I had no money to buy lunch and I walked miles because I had no bus fare.” We struck a chord because his hard life and his hard work to climb the ladder, resonated with me.
We shared stories and developed a cordial friendship that lasted far beyond our days at NDB. A very smart man who absorbed information like a sponge, he read every single board paper before he came for a meeting, knew the list of debtors by heart and would come up with practical solutions for various problems. Many years later, when he moved to his home at Albert Crescent, he telephoned me and said, “I am now your neighbour. Come over for dinner.” Anarkali and I joined his wife and three daughters for dinner one evening.
Dhammika is a man with no airs, speaks his mind and is a wealth of information. I was very impressed by him, because he is a person who, though amassing plenty of wealth, knows the value of education and hasn’t forgotten what it’s like to go hungry. He has worked on that promise he made to himself to make education accessible to everyone, very similar to Kannangara’s policy, by adding various initiatives into the education system. DP Education which he launched as an educational television channel is one such.
Although I was occupied with various projects, I did have bad days when I realized that Susil was no more by my side. Sri Lanka held many memories for me and my escape route was London. After our separation, I spent an inordinate amount of time in that city, because it was my second home, embracing me with a familiarity that made me feel secure.
Having relied on Susil for nearly every major decision in my life, the shock of the separation and consequences had sapped some of my confidence. Ranil Wickremesinghe, who was by then Prime Minister and knew me from J R’s days, may have had some intuition about how I vacillated from good days to bad days, and that my confidence teetered more often than not. He also knew my capabilities and my educational background. He asked me to take over as Chairman of the Ceylon Electricity Board.
I’ll always be grateful to Ranil for the offer because it really did give me a confidence boost.
I was well qualified for the job, there was no doubt about it and the engineers at the CEB wanted me to take on the post of Chair. The CEB was a loss-making entity and I was very confident that I could turn it around. I didn’t waste a day after I was offered the job and started reading up the various plans and papers to get myself up to speed.
In fact, I even met the Country Head of the IMF at the time, Nadeem Ul Haq, and had some informal discussions with the trade unions about turning the CEB around. The plan was to connect the Indian and Sri Lankan grids, with funding of USD 75 million from the IMF. We would purchase electricity during peak hours, but sell our excess to India. Plans were in motion and I assumed my appointment was a done deal.
However, what I didn’t realize was that cogs had begun turning elsewhere to halt my appointment. The General Manager of the CEB at the time, who was a batchmate of mine in the university, was not in favour of having me as his boss. There was no reasoning, just that he didn’t want me there. I didn’t know about this spoke in the wheel and was readying to sign on the dotted line no sooner I returned from my holiday to Prague and Budapest with Rohini Nanayakkara.
It was Karu Jayasuriya who was tasked with confirming my appointment but when I did meet Karu on my return, he explained the conflict that had arisen. I was truly surprised because I didn’t think any of my batchmates would have a problem having me there. Karu made excuses for the GM’s inanity and I walked away thinking, “What a shame. The country could really benefit if this plan was brought into play.”
Ranil had obviously been informed of the developments because a few days later, his close friend Malik Samarawickrama telephoned me. “The Prime Minister wants you to take over the chairmanship of Bank of Ceylon,” he said. I wondered if this would be yet another CEB fiasco and asked him so, to which he replied that the appointment was already official.
I had been on the Board of NDB since 1993, something I thoroughly enjoyed and reluctantly resigned from that due to a conflict of interest. In December 2002, I took over as Chairman of Bank of Ceylon reporting to President’s Counsel K N Choksy who was Finance Minister. When I met the Minister, he made one thing clear. “Mrs. Moonesinghe, this is a non-executive post but I want you in the bank full time, which means the whole day. I need someone to be hands-on.”
As was my habit, I always did my homework on any undertaking. When I walked into my office at BOC, I had already studied the workings of the largest State bank in the country with its 525 branches. There were anomalies I wanted to rectify. The first was efficiency. I commissioned a tender to network all 525 branches around the country. I wanted the whole process to be open and transparent.
After the bids were called, I shared all the proposals with each bidder. I was also aware of how tenders worked, having been in the tender business most of my life. I let it be known to the bidders that while the software was cheap, companies charged high for ownership and maintenance. So the evaluation process had to be done with great clarity. The tender was awarded to Fiserv Inc, a Fortune 500 company renowned for their cutting-edge technology in financial services.
When the minutes of the previous meeting were read at my first Board meeting, the minutes stated that the BOC non-performing loans from the Government amounted to a considerable Rs. 13 billion. After some discussion, the Board had decided to sue the Government. I was quick to point out however that this would be a futile exercise.
“How can we sue the owner?” I asked. “The Government owns the BOC.” But I also had a solution. “The Wellawatte Spinning & Weaving Mills land is lying abandoned and has not been used for 20 years. Shall we try and recoup our money using that?” I had a multi-pronged plan.
I spoke with Prime Minister Ranil Wickremesinghe and told him about the Rs. 13 billion NPL in our portfolio owed to us by the Government, as well as the Rs. 1.5 billion which the Shipping Corporation owed BOC. I suggested that the Spinning & Weaving Mills land be handed over to BOC in lieu of the Rs. 1.5 billion. We had already done the valuation of the land and although it was worth only Rs. 750 million, I surmised it was something better than nothing. He gave the green light and I put the next phase of my plan into place.
I wanted to develop the land, which meant I needed a real estate developer. From our days in Singapore, I had always kept abreast of that country’s developments and an individual who continually showed up on my radar was real estate developer Tao Shing Pee or S P Tao as he was known. I had followed his career primarily because he was a keen investor in Sri Lanka. S P Tao is internationally renowned in real estate development and founded Singapore’s Shing Kwan Group.
When the Singapore government encouraged Singaporeans to invest outside of their country, S P Tao was the only investor who saw potential in Sri Lanka. He is famously known to have said that he looked for two ingredients in the countries he invested in: “The rule of law applies and there is freedom to express oneself. And in Sri Lanka that is the greatest sovereign value.” This was S P Tao’s rationale for setting his investment roots down in Sri Lanka way back in the 1960s when he shipped rice from Burma to Sri Lanka, fell in love with Sri Lanka and made his first million in US Dollars, in that order.
He also had a 25% stake in the Ceylon Shipping Corporation. Unfortunately, Finance Minister N M Perera in Mrs. Bandaranaike’s Cabinet told Tao he was not suited to the workings of a socialist set up. Tao didn’t hesitate. He got rid of his 25% stake and left Sri Lanka for a while.
On President Premadasa’s diktat, his trusted emissary Paskaralingam was dispatched to Singapore to persuade Tao to return. Tao’s love for Sri Lanka was so strong that despite a raging war, he needed little persuasion. Shin Kwan acquired Overseas Realty Ceylon and began the development of the World Trade Center in Fort.
S P Tao was also a customer of BOC. He had placed USD 6 million, his family’s cash assets, in a fixed deposit at Bank of Ceylon which was earning a very high interest rate. The Bank had structured an RCCPS loan — Redeemable Convertible Cumulative Preferential Shares against that FD – which was a first for Sri Lanka at the time. The structure was such that if there was no capital repayment or interest for the tenure of this instrument and the loan remained unpaid on maturity, BOC would receive ORCL preference shares, valued on the day of conversion. When I checked, the share price was less than Rs. 5 and ORCL owned 95% of the shares. In the larger scheme of things, the RCCPS loan was useless to BOC.
I asked the General Manager to arrange a meeting with S P Tao, who flew down from Singapore for the meeting with me. I introduced myself and with my usual forthrightness said, “Mr. Tao, I’m a businesswoman; not a banker. I don’t want your stocks and shares. Your loan is a distressed loan and it is non-performing, which means we can take over your property. But I’m not going to do that. My inquiries reveal that you are selling your floors at the World Trade Center at USD 160 per square foot. So here’s how we’ll move forward.” I told him I want the floors at the distressed value of half the price – USD 80 per square foot.
The amazing characteristic of great business leaders is they take calculated risks, which was evident in how Tao had invested in Sri Lanka. These leaders also know when to cut their losses and make a deal to trigger a win-win formula. He agreed to my price of USD 80 per square foot and BOC took over eight floors of the WTC in lieu of the loan. We rented it out to the Board of Investment. I also had plans to open a Premier Centre for BOC on the ground floor.
I knew S P Tao was a man I could work with and it wasn’t just the floors at the World Trade Center that I wanted. It was now time to set the next phase of my plan in motion. I telephoned him again, this time with an investment prospect for the Wellawatte Spinning & Weaving Mills land which was an idle asset, unused for over 20 years and not even used as a car park.
“The BOC has 18 acres of undeveloped land in an excellent location in Wellawatte,” I said. “Would you like to take it over for a mixed development project like those projects in Singapore? Sri Lanka doesn’t have any project resembling one and yours will be the first.”
I had does my homework and knew the visibility Tao had in property development in Singapore, specifically having developed famous hotel complexes including the Marina Mandarin and Pan Pacific. This was his strength. He accompanied me to see the land and once he saw the location, I knew he was in and thus began the genesis of Havelock City.
Unfortunately, my tenure at BOC ended rather abruptly. The uneasy alliance between President Chandrika Kumaratunga and Prime Minister Rand Wickremesinghe’s government ended in 2004 when Chandrika hijacked the government with JVP support, resulting in all Ranil’s appointees vacating their official posts.
However, I learned much from my discussions with S P Tao a visionary human being whose thought process was way ahead of his time. Even though he left an indelible presence in the landscape of Colombo with the World Trade Center and Havelock City, his business path in Sri Lanka was not easy, continually fraught with challenges. In 1997, he had weathered his World Trade Center towers being blasted by two truck bombs detonated by the LTTE, but the quality of workmanship and construction was proven when the towers showed minimal structural damage.
Much later, long after my tenure as Chairman of BOC, he also had issues with the subsequent management of BOC which owned 40% of Havelock City. Continued spokes resulted in the project being unduly delayed. As a last resort, he acquired the BOC shares so he wouldn’t be encumbered with continuing problems, although that buy-out gave BOC a hefty profit, way above market value.
He wrote a letter to me once, stating, “Sumi, had you remained the Chairperson of BOC, I would have completed the entire project in three years. Instead it took over a decade to complete.”
An investor of lesser grit would not have remained in Sri Lanka but he did. Such was his loyalty and love for this island. China, Hong Kong and Singapore had so much more to offer with an enabling policy and environment. In fact, Tao’s first foray into China was in Nanjing, the capital city of China’s Juangsu province where he developed the 800-room Jinling Hotel, and this city conferred on him the status of Honorary Citizen of Nanjing for his business achievements and philanthropic initiatives. It was also in this city that Tao spent his last days before his demise on August 24, 2021. He was 105 years old.
My heart was filled with sorrow when I heard of him passing away. Besides being the Chairman of Shing Kwan Group at the time of his death, he was also the founder and patron of Jiangsu Tao Shing Pee Education Foundation and Jiangsu Charity Foundation. This grand old man had lived his life to the fullest, doing what he loved best and being in places he loved, dark times notwithstanding. I felt truly blessed to have known a man of his stature in my lifetime, a man who was a true friend to Sri Lanka, who took a gamble on a war-ravaged underperforming country and created wealth and iconic real estate value.