Nahil Wijesuriya & ‘SATHOSA’ Under Ravi Karunanayake
Upali Cooray
“There is a house available at Monarch residencies and it belonged to Nahil Wijesuriya’s (NW) daughter who is a friend of my daughter.” This extract is from MP Ravi Karunanayake’s (RK) statement in Parliament.
This story of RK& NW started more than 17 years ago. RK was appointed as the Minister of Commerce and Consumer affairs. NW was appointed as Chairman of SATHOSA by PM Ranil Wickremesinghe (RW) in President Chandrika Kumaratunga’s Government in the year 2001.
Nahil Wijesuriya (NW), one of the richest if not the richest, businessmen in this country. Coming from Trinity College Kandy, is a professional Engineer.
NW was a person in a hurry. He required results and motivated the existing staff to work according to his thinking. The Rajagiriya, Welisara and Jawatta super markets were brought up to higher standards of customer service on par with private owned super markets with online transactions for the shops including bar coding and stock control. Further plans were on, for expanding the online system, Island wide.
Pay increases on par with private sector were offered to attract skilled personal. He did not tolerate political influence. He supervised the engineering staff of SATHOSA day and night to give his skills in refurbishing the shops such as display arrangements and customer service. I personally consider him as a Maverick. That is his success as a businessman. However NK resigned suddenly just after I resigned in disgust from SATHOSA in July 2002. The reasons for NW’s resignation are not known to me. However I observed that he wanted to perform quite independently from the minister. Furthermore, He had his group of companies to look after. His frank view was SATHOSA staff was a hardworking and efficient lot.
Ceylon Biscuits, which put in a joint bid with another Sri Lankan firm, Carsons Group of Companies named International Grocers Alliance (IGA) was among the five parties that submitted bids for the sale of retail arm of SATHOSA consisting 150 units. The distribution of goods was handed over to a logistics company named LOGIVIS. Previously SATHOSA did its own distribution all over the country very successfully. To make a very long story short, appointing LOGIVIS was a disaster. IGA wanted a “state of the art” system introduced.
As a consequence the retail division of SATHOSA started reducing its work force via a voluntary retirement scheme. The VRS was offered when a 40% stake and management control of the SATHOSA retail unit was sold to the local consortium for 650 million Sri Lankan rupees ($1=LKR96.90) in July 2002. More over 100 casual employees were terminated on the pretext of over staffing and a similar number was appointed from RK’s electorate. Even illiterate drug addicts were appointed to the casual vacancies.
The IGA consortium miscalculated the political situation when Chandrika Kumaratunga led government came to power in 2004. Jeyaraj Fernandopulle was appointed Minister.
There was a necessity to probe the institution during the period RK was the Minister. RK would have been found out much earlier in 2004 long before the Penthouse deal. The new Minister Jeyaraj Fernandopulle disregarded it. It was believed by some, that RK and Jeyaraj were buddies though they belonged to different camps. “Birds of feather get together”.
The Directors of SATHOSA retail were giving excuses. The first excuse was the government’s failure to raise of Rs 150 million. The second was full control. They resigned claiming these demands were not met. The real reason is lack of any experience in doing the job.
All distribution of staple foods needed by the poor segments of the market went haywire under the management of IGA. The orders placed for goods far exceeded the requirements. Transport was erratic. Once, a lorry was sent to Kalutara retail unit with a full load of requirements and then went to Negombo unit with only two bags ofB’onions. Around 750 cases of “Sustagen” powder was laying at Buttala shop, a faraway area where poor customers are a majority. They go for lesser priced local substitutes A tin of “Sustagen” was over Rs. 1000/-. It is pertinent to note that even one of the share holding companies Ceylon Biscuits Ltd had to take back their confectionary products worth over one million rupees at that time. The new purchasing manager had no idea of market segments; re-order levels and re- order quantities. Distribution was in chaos. It was too late when IGA realized this chaos within one and a half years. The contract with LOGIVIS was terminated. As a result of these grave miscalculations through ignorance, the average turnover was below Rs. 300 million for the first six months. Conversely purchases under the new management showed 1.5 Billion. This quantity could cover entire six months operation
