Lanka makes Apollo takeover tough

The Board of Investment has set tough conditions for Apollo's takeover by corporate raider H Jayawardena, reports PK Balachandran.

The Sri Lankan Board of Investment (BOI), which approves and governs foreign investments in the island, on Tuesday set tough conditions for the takeover of the Apollo Hospital by the local corporate raider Harry Jayawardena.

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BOI said in a statement, that if Jayawardena were to take over, he would not be entitled to the conditions under which the Indian promoter had been working.

The raider would not be entitled to the tax and duty concessions granted to the Apollo project at its inception as a Special Development Project.

He would have to pay the current market price for the land on which the hospital stands.

Apollo Hospital India came to Sri Lanka in 1999 at the invitation of the then President, Chandrika Kumaratunga.

It was given tax and duty concessions and land at a concessionary price.

The cabinet decision in relation to the hospital project had also stated that the Indian promoter Apollo Hospitals would own a substantial stake in it and manage it.

Earlier, when the Indian High Commissioner took up the matter with the Minister for Industrial Promotion, Rohitha Bogollagama, the latter had said that he would not allow any hostile take over.

He also announced that the President of Sri Lanka. Mahinda Rajapaksa, said that the state-owned Bank of Ceylon's subsidy, Property Development Ltd, which owned 13.6% of the stake, would not accept raider Jaywardena's mandatory offer of shares.

The Indian mission had impressed upon the powers-that-be in Colombo, that if such a take over were to take place, it would "very negatively" affect future Indian and foreign investment plans in regard to Sri Lanka.

All this makes the take over of the Lanka Hospitals Ltd (Apollo) quite unattractive for Jayawardena.

Earlier, he had upped his stake in the hospital from 20 per cent to 38 per cent and intended to take it over.

Indian corporate sources alleged that this had been done by arm twisting.