SMIB RESPONDS TO DAILY MIRROR ‘EXPOSE’

Following is a Right of Reply sent by General Manager/ CEO of SMIB L. T. Asuramanna with regards to the Daily Mirror (DM) expose carried under the headline ‘Lossmaking SMIB faces political pressure in recovering loans’ and published on April 8, 2024. As a responsible media organization, the DM is publishing the Right of Reply in full followed by a Reporters Note.

LETTER TO THE EDITOR - RIGHT TO REPLY

State Mortgage and Investment Bank (SMIB) would like to bring to your attention that the article (‘Loss-making SMIB faces political pressure in recovering loans’) published in the 8th April 2024 edition in the Daily Mirror, is riddled with mis-statements and inaccuracies, compounded by the fact that the writer in question has refused to meet with the Chairman of the SMIB for detailed clarifications prior to publishing the defamatory piece.

Starting from the misleading headline itself, the writer indulges in defaming the bank without citing any official data or audited accounts to back- his claims. While this letter will be responding to each erroneous statement by the writer, the Bank would also like to bring to your notice that this was an internal meeting (which was referred to by your writer) between 80-100 staff and management, which has been leaked by the writer and misinterpreted, which in itself is illegal in the first instance. It was never a “public meeting” as the writer claims. This tantamounts to leaking a private conversation between staff and employer. All these factors have serious implications for the journalistic integrity of your publication which is unceremoniously sacrificing truth in favour of sensationalism and click bait. As you can imagine, such inaccurate reports have a devastating impact on the bank and its stakeholders, causing them undue and unwarranted emotional stress.

At the outset, we would like to reiterate that SMIB is not “lossmaking” as claimed in the heavy font headline by your publication purely to grab eyeballs. As of 31st March 2024, SMIB had recorded Rs.45.9 Mn in Profit after tax which was subsequently maintained in lq2024 as well, which reflects that the Bank has recovered from the pressures of the economic crisis and the preceding pandemic. The Bank has recorded profits continuously for the past 10 years until the first three quarters in 2023 due to external macroeconomic factors. Over the past decade, SMIB has recorded year-on-year asset growth of an average rate of 8%. However, the Bank’s decision to put customer well-being first and not pass on the high-interest rates to customer loans was a factor in reduced profitability in the first half of 2023. Considering this article was printed in April 2024, it’s evidently clear the journalist has done zero due diligence and not referred to the company’s latest financials to support his claim of SMIB being “loss-making”.

The meeting referred to in your article is regularly held by the General Manager of SMIB, Thushara Asuramanna, to update employees of the state of the industry, on how the company is doing and to boost morale. The General Manager commenced the meeting by tracing the challenging situation created by the economic crisis since 2022, which is being faced by banks and other financial institutions, and many companies across all sectors. He went on to detail how the Bank has navigated the crisis and turned around operations to register profits. Explaining the history of SMIB’ s challenges, Asuramanna said that by the middle of 2022, there were around Rs 50 million month-onmonth losses due to the escalation of market interest rates which went from 8% to 21% and was later brought down to 13%. During the meeting, the GM was talking about these percentages but the journalist has mentioned the same figures in millions of rupees in the erroneous article which shows his glaring lack of understanding of economic or financial analysis.

The meeting referred to in the defamatory article was private, held in the company auditorium, between management and employees. The journalist falsely claims that it was a “public” meeting to justify violating privacy laws. In essence, the writer is abetting an act of secretly recording a private meeting and despite the legal implications, publishing it in the newspaper. We will take punitive measures against the source of the leak and we have no doubt that they will in turn reveal the motivations behind the hack job carried by your publication.

At no time did the GM claim pressure from the presidential secretariat as claimed by the writer. Instead what the GM did say is that as a state institution, many stakeholders regularly call the bank - be it from government, central bank and other state bodies - to consider leniency for borrowers. However, as an independent banking institution, SMIB is in full compliance with Central Bank guidelines when it comes to loan recoveries and always follows due diligence in this regard.

Also, to bring to your notice, this meeting was held in the Bank’s auditorium at its own premises and at no time did employees “surround the head office” as claimed by your journalist. This casual dramatization by your writer, which never took place in reality, is shocking to say the least.

Moreover, at the meeting, employees were told that in lieu of the challenging times the management hadn’t taken a decision on the New Year bonus and would update them at a later stage. Please note there was no deviation this year from our practice from previous years with regard to bonuses as claimed by your writer. The article alleges that because we were not recovering losses due to political pressure we could not give bonuses. Significantly, all the positive accomplishments mentioned by the GM during the meeting were totally omitted in the article by the journalist, which confirms the single-minded aim of the journalist to malign SMIB for reasons best known to him.

Further, the GM did not blame employees for the situation but instead mentioned that macroeconomic conditions were not lucrative during 2023 and high interest rates increased cost of funds, which impacted not just SMIB, but the entire banking sector.

The writer has also mentioned the term, “the GM admitted”. The Bank would like to bring to your notice that no questions were asked to elicit “an admission”. Instead, some employees wanted to know the status of overdue loans and the GM duly explained the swift actions taken in line with CBSL guidelines. Any bank has a number of loans and as of now the Bank has taken necessary steps to recover dues. A vast number have already been partially recovered.

Further, the suggestion that SMIB was singled out for questioning at COPE and CBSL meetings is wrong because stateowned institutions are routinely queried during these meetings as we are responsible to respective government bodies. It does not indicate there is a problem per se as implied in the article. The CBSL staff regularly visit us and conduct audits as per procedure since SMIB is under supervision of the central bank.

The Daily Mirror writer has also attributed a quote to a SMIB Union Spokesperson. However, the SMIB Union has issued a formal letter stating that none of their members has spoken to the media. We would like a clarification on this issue as the Bank Union is highly aggrieved to have been dragged into this allegation. As per our rules, only the GM is allowed to speak to the press.

On the questions of the fraud committed by some parties in 2017, this is open knowledge and under investigation by the police and the CID. Additionally, the Bank has already taken disciplinary action along with recovery action internally to recover funds.

The Bank would also like to bring to your notice that the photographs used in the article of the Chairman and GM of SMIB have infringed copyrights as they have been exclusively shot for the SMIB annual report. As such SMIB holds the copyrights or those images.

This defamatory and misleading article has triggered calls from worried depositors and caused them emotional trauma. This defamatory piece has challenged our relationships with them. Moreover, when Chairman of SMIB, Joseph Soosaithasan, asked the Daily Mirror writer to come and meet him, your writer refused and published the article without allowing SMIB the right to reply.