* Pulling out following controversies, approval procedures- Navara Chairman
By Ravi Ladduwahetty
Mixed reactions were evoked yesterday on the latest situation regarding the Navara Capital- led consortium’s proposed acquisition of the unlisted MBSL Savings Bank with news reports claiming that the deal was cancelled but Merchant Bank maintains that the deal was still valid but Navara confirmed and insisted the pull out due to controversies and approval procedures .
The deal and the MoU was still valid and there was no reason for both the Navara Capital to pull out which they have intimated in a letter last week, MBSL Bank Chairman M.R. Shah told The Island Financial Review last night.
There was no reason for the cancellation of the deal as there was a firm commitment on the part of Navara as they deposited Rs. 100 million as a part of the Rs. 562 million and we have informed the Bank of Ceylon Board of Directors as well about the transaction as well.
Shah said that one of the reasons which Navara attributed for the pull out was that MBSL had not informed the Bank of Ceylon Board which we have done, Shah said, adding that all the norms of corporate governance and transparency were adhered to in the deal.
Responding to a question as to whether there were the options of legal redress, Shah said that there were but the decision had to be taken by the Board of Directors of MBSL after careful consideration. "On the other hand, if they are definitely pulling out, we will have to auction the transaction all over again," he said.
Meanwhile, Navara Chairman Harsha De Silva said that the consortium which were to acquire MBSL Savings Bank – Navara, Lankem, PC House and Siddhalepa had decided in unison and in combination to pull out due to the controversies raised in The Island Financial Review in its lead story in the Saturday May 19 edition and also due to the approval process by the MBSL Board and the Bank of Ceylon Board.
"We have decided as a consortium in the best interests of the stakeholders to pull out due to the controversies raised in The Island Financial Review and the approval procedures," De Silva told this newspaper last night
He also clarified that although Navara was the lead partner in the transaction, it was the consortium which was to purchase the MBSL Savings Bank and not Navara alone.