Way forward for Expropriation Bill

In order that within the context of the limited assurances secured by the Joint Chambers, the Revival Of Underperforming Enterprises and Underutilised Assets Bill can be adopted:

• Minimizing the perceived risks and damage in the eyes of local and foreign investors and the international community including risk rating agencies
• Mitigating the risks of perceived non compliance with the
• BOI Laws and Agreements
• Multi-lateral investment agreements  and
• Constitutional investment guaran

tees 

It is recommended that the Joint Chambers seek  that the Bill be amended to provide for the following before its enactment



1.The date of vesting of the 37 entities and assets listed in the schedules I and II be made effective 90 days following the bill being certified by the speaker to have been duly  enacted



2.Any director, officer or any other person directly or indirectly taking any steps or actions to deliberately reduce the present value of the enterprise or assets listed in schedule I and II , or illegally removing or destroying any asset or incurring any liability/contingent liability other than those in the normal genuine course of business, commencing from the date the bill had been tabled in Parliament, be made liable for criminal punishment following a trial before a magistrates court



3.Permit the entities listed in Schedule I and II and their stakeholders with due interests, to submit within 30 days of the Bill becoming certified

 a.to the Secretary Ministry of

Finance a restructure plan to dem

onstrate that the entity and or the

asset concerned will be made perform

ing and utilized within a period of 18

months from the date the vesting is

due to take place or

b.to seek and obtain a legal injunction

from an appropriate court that the

purported vesting is illegal and out

side the framework as specified in

the  law



4.Where the government accepts the restructure plan as rendered in terms of 3 (a) above or rejects such plan, the Secretary Ministry of Finance to intimate same within 30 days of such plan being submitted



5.Where the government accepts the restructure plan in terms of 4 (above), the entities be required to have same plan progressed as a restructure in terms of the Companies Act, under the supervision of and to the satisfaction of an appropriate court of law and be required to effectively implement such plan over a period of 18 months achieving the set goals and targets, during which period the said entities will have the protection of a moratorium from creditors winding up actions and such other protection and relief as deemed appropriate by the relevant court of law and where the said court determines at the end of the said period 18 months that the entity has failed to effectively implement the plan then the entity or the asset concerned will immediately vest in the Secretary to the Ministry of Finance in terms of the Bill



6.Where the Government rejects the restructure proposal submitted in terms of 3 (above), the entity or the asset will vest in the Secretary to the Treasury within a period of 30 days from such rejection being duly notified to the entity, unless a legal injunction from an appropriate court that the purported rejection of the restructure plan is unjustified, mala fidei, illegal and or outside the framework as specified in the law is duly obtained by the entity



7.The scope of the Bill be amended in order that the entities and assets as defined and come within the purview of the bill are only those that specifically can be justified to be non performing enterprises and or non nonperforming assets over the past three consecutive  years ( ie. change from underperforming and underutilized assets ) and do not include any assets or enterprises which are privately owned and have not benefited by:

• land grants or land leases made by

the Government or

• tax concessions granted by the

Government or

• by way of investments made by the

Secretary to the Treasury as a share

holder or creditor

         and have failed to meet the primary purposes for which such land allocations, tax concessions and investments were made by the Government.

(The writer is a former Chairman of the Ceylon Chamber of Commerce)