brand logo

New gas company dissolved 

27 Sep 2021

  • Decision taken at meeting with President’s Secretary
  • Formation of the company was ‘at the will of a few Treasury officials’
  • Company was set to hurt Litro, boost Laugfs 
By Pamodi Waravita The Treasury Department’s newly formed and controversial special purpose vehicle (SPV), gas company Siyolit (Pvt.) Ltd., has been dissolved following a meeting held at the Presidential Secretariat last week, The Morning learnt. Well-placed sources told The Morning that in a meeting which was held with the Secretary to the President Dr. P.B. Jayasundara last week led to the dissolution of the SPV. Siyolit (Pvt.) Ltd. was set to impact the State-run Litro Gas Lanka Ltd. negatively whilst boosting the prospects of privately-owned Laugfs Gas PLC by making Litro heavily reliant on Laugfs for its operations. High-level officials earlier told The Morning that they feared the SPV would leave Litro Gas “at the mercy” of the latter. They further alleged that the SPV was initially formed disfavouring the State-run gas company, at the will of a few officials from the Treasury Department. The SPV was formed with the stated aim of procuring gas in bulk to both Litro and Laugfs in order to decrease the cost of procurement and to ultimately provide a cheaper price for the consumer. Whilst Litro was to hold 75% of its shares, Laugfs was to hold 24% of its shares, with the Treasury Department set to hold the remaining 1%. It was initially decided to form a director board comprising three representatives from Litro and one from Laugfs to reflect the shareholding, and to appoint the Chairman of Litro as the Chief Executive Officer (CEO) of Siyolit. However, this composition was later changed to include two representatives from Laugfs instead of one. Furthermore, it had been decided to appoint an independent CEO and not the Chairman of Litro. “Interested parties have called to question the intentions and integrity of recently formed liquefied petroleum gas (LPG)-buying firm Siyolit (Pvt.) Ltd. headed by Susantha Silva. It has been observed that the directorate of this firm is lopsided, with two directors being allocated to Laugfs which has a roughly 20% market share, while Litro, with over 80% market share, only being allocated three directors,” a press release by the Litro Surakeeme National Unity said on 17 September. A letter was sent to the Treasury Department by Litro, requesting an explanation for this disproportionate representation in the newly formed SPV’s director board, where Litro, despite owning majority shares, has only three seats whilst Laugfs has two. However, when The Morning contacted Treasury Secretary S.R. Attygalle on 19 September regarding the matter, he said that he has not been informed of any concerns. Furthermore, it has been proposed to utilise the terminals owned by Laugfs at the Hambantota International Port to store the cargo which will be jointly procured by Litro and Laugfs. “Further, Siyolit (Pvt.) Ltd. insists on buying from Litro only via Laugfs’ bunkering facility, which necessitates transporting LPG from Litro’s facility in Kerawalapitiya to Hambantota by sea. Litro is compelled to obtain the necessary infrastructure for this process from Laugfs at an additional cost,” alleged the Litro Surakeeme National Unity. The Litro Surakeeme National Unity, composed of employees and civil society members, have alleged that these actions could sabotage the profit-making Litro in favour of its competitor. Litro currently holds approximately 70% of the market share whilst Laugfs holds only 30% of it.


More News..