Oh
Please Where are our journalists? Where are our investigative journalists who
should pick up these common sense wrongs of society and inform the public? They
are too busy enjoying the scraps thrown by the likes of these companies to
report cautiously, inquisitively, voraciously, and questioning the veracity of
the statements made in full public view!
DIMO or Diesel and Motor Engineering
PLC, won the award for the Nth consecutive year as having the BEST Integrated
Accounting Report in Sri Lanka of the Companies that entered the competition at
the award ceremony held at the opening ceremony of the CMA Annual Conference at
the Cinnamon Lakeside on Monday, July 17th 2017 beating out numerous
other Companies.
What is Integrated Accounting? – It is
defined as “a Report which is a CONCISE Communication about how an
organization’s strategy, governance, performance and prospects lead to the
creation of value over the short, medium and long term!”
Frankly, it is anything but. Shame shame shame. Shame for the CMA in
giving them this award, shame for DIMO in even believing they achieve the above
objective from their 185page small type report, which is anything but concise
and nothing if misleading with verbocity of disinformation simply aimed at
fooling the reader and observer in broad daylight.
In some senses one can fool people by
not giving any information, in this case it is fooling with too much
information aimed at making the reader believe in both transparency and
objectivity, but if read in context by a careful, knowledgeable and half way
intelligent person, it is clear the LAST thing that DIMO even attempts to do is
to create value for their main stakeholders who are its shareholders, and in
the sense of a Quoted Company whose aim SHOULD be to over time to encourage
WIDE SPREAD share-ownership, it is doing anything but.
Read the report if you wish as it is
available on-line to disprove my hypothesis, on link https://cdn.cse.lk/cmt/upload_report_file/694_1496746469.pdf
Lets go straight to page 136 which shows
that the Directors’ Emoluments have risen from Rs300M to Rs500M year on year,
the latest being for the year ended 31st March 2017. This is about the
same as the POST TAX PROFITS – shameful. Hardly one that will encourage a
person to buy DIMO shares, if the Directors simply help themselves to the LOOT.
Any reasonable person will say it is simply untenable that a public company is
allowed to this, even OPENLY!
Then go to page 168 where you see that
the top 20 shareholders own 83% of the company, hardly one that is encouraging
widespread ownership. Further you would note that EPF as No1 own about 20% of
the Company. Who is the EPF? Well, they are the Trustees of the Private Sector
Workers Pension Plan, in short the money of the MOST productive part of our society.
Sadly this is managed by the CBSL, Central Bank of Sri Lanka, and typical of
Governmental Bodies DOES NOTHING TO PROTECT THE PEOPLE THEY PROMISE TO SERVE.
We have just heard about their dishonesty haven’t we?
At least the EPF have a DUTY to question
if the Company they have a 1/5th interest in is paying its directors
such a MAMMOTH remuneration when page 168 shows that they ARE ALSO the large
shareholders, who enjoy Dividend INCOME in addition to directors fees! Where is
the Independent Director here? A prominent
accountant on the Board, he should question this first and foremost, or is the
trust placed in him MISPLACED, as he has waived on this payment without
question, because he too is paid handsomely? Is this just a BRIBE to keep
quiet? So where is the ICASL on this? All rogues too leading it.
What am I coming down to explain? It is
simply jobs for the boys and what are they doing? They are sharing the loot
amongst themselves, while the Stock Market Tanks, with NO one wishing to risk
their money in the SL Stock Market when such practices are rampant, akin to
STEALING IN BROAD DAYLIGHT, or daylight robbery of the people’s money, yes the
money of the millions of hardworking people of Sri Lanka via their pension plan
invested in this company. Yes none is doing anything about it. Where is the
independent press?
I have not picked on DIMO for any
particular reason, it was just when I saw they had won the award for the Best
Integrated Report and I then went to look at this so called BEST report and
look what I found! It is what I have just reported to you my reader. So much
for the johnnies who are bribed to award losers!
If this is by chance with NO malice, how
many ROGUES have we got at the top of the Corporate Ladder? John Keells who
came second will come within my periscope next. We know how well the Board pay
themselves in Share Options to the extent that if you see from the start of the
Directors Appointment to today, how many shares they got, how many sold, how
much they benefitted this Rs500M pales in comparison to the Rs5Billion ripped
off by the TOP man there, without a MOO
from the shareholders who are held hostage!
Come on guys, who will invest in a market
so corrupt and inequitable that they do NOTHING to enhance the value of the
most important shareholder namely the small shareholder, whose faith in Stocks
is the only way to encourage widespread share-ownership. CSE no doubt is still fast asleep day dreaming!
Unless this greed can be curtailed our CSE has not future. It is just 200 people who dominate the boards, the shareholders and the companies in every way. We don't have a real stock market by any stretch of the imagination. Unless we change the element of greed at the top there is no hope.
ReplyDeleteIt is a chicken and egg situation. Someone has to begin the process of change. Trust is at the heart because it is evident that Sri Lankan companies cannot be trusted as the owners and managers together take the Company for a ride and to bring it onto the market a change of emphasis is needed from putting their servants on the Company payroll to being extremely careful not to misuse the Company for personal gain.
ReplyDeleteDimo is still not a good company in that way and it is clear that they by producing the most expensive Annual Report in Sri Lanka have yet to learn that they are wasting time producing this detailed report especially as it is clearly a smoke and mirrors job fooling every one including the judges in this instance.
We just don't have people of integrity even in a judging panel to call a spade a spade, and clearly the might of a company automatically demands they are treated with awards. It is part of the BORU SHOW of Sri Lanka to showcase the worst companies as the best. Just look at the Return on Shareholders funds of JKH pathetic when compared with the 100% + return of companies like Nestle Sri Lanka. Its all to do with the poor management that companies are not lean and mean and are profit motivated. In Sri Lanka successful companies are only good at paying the senior management well and treating everyone else appallingly. Most aspiring managers of calibre see this path to the top stopped and so get as much experience and leave for foreign pastures denuding Sri Lanka of its talent.
Come on guys lets be serious here. Asitha Talwatte is a Director of DIMO and a prominent Chartered Accountant. (page 24 of the DIMO accounts has his name and his proud photo) He is ALSO the Chairman of the Integrated Reporting Council of Sri Lanka (IRCSL). SO How can DIMO be awarded the Best Company Report of Integrated Accounting? He cannot even recuse himself due to the indirect interest he holds.
ReplyDeleteI don't know what his emoluments were from DIMO though it would be interesting to find out if they pay themselves so much, even he is likely to be remunerated handsomely for attending a few Board Meetings, so would be paid at about Rs1M per hour of work at the low end. Shouldn't the EPF query this kind of remuneration if they own 20% of DIMO. Where are the interests of the People of Sri Lanka as represented by EPF safeguarded?
It is time the EPF is managed independently of the CBSL and any other body, but by professionals with integrity in the form of a trust that is devoid of Govt. appointment or interference that requires to be audited independently by a foreign auditor as local accountants are basically corrupt, see Asitha Talwatte as an example.