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Commercial Bank of Ceylon Plc bagged the coveted Cyril Gardiner Memorial Trophy Gold Award for Overall Excellence at the 53rd CA Sri Lanka Annual Financial Report Awards held in Colombo yesterday. From left: Central Bank Governor Dr. Indrajit Coomaraswamy, Commercial Bank of Ceylon Plc Chairman Dharma Dheerasinghe, Prime Minister Ranil Wickremesinghe, Galle Face Hotel Group Chairman Sanjeev Gardiner, Commercial Bank of Ceylon Plc Chairman Preethi Jayawardena and CA Sri Lanka President Lasantha Wickremasinghe - Pic by Sameera Wijesinghe
By Charumini de Silva
Sri Lanka’s best companies were called on by Prime Minister Ranil Wickremesinghe yesterday to invest, create jobs and deliver high shareholder dividends that will be supported by the Government with legal and regulatory reforms and through a new Development Bank which will disburse funds worth as much as Rs. 35 billion for expansion in 2018.
Addressing the 53rd CA Sri Lanka Annual Report Awards, he encouraged the private sector to make use of the new Inland Revenue Act and the incentives proposed in Budget 2018.
To invest in new sectors of the economy to actively engage the growth trajectory of the country.
The Prime Minister was upbeat on the standards of financial reporting exhibited by the private sector but acknowledged that the government sector’s financial reporting remained unimpressive. However, Wickremesinghe encouraged all top corporates to play a leading role in the economy, to support a more outward looking private sector which would ensure fast growth for the country.
“Looking at the profits and the performances of the companies, I encourage you all to call on your clients and invest in different sectors. We are in the growth area of Asia and I want our enterprises to play a leading role,” he said.
The increased number of awards every year showcases the importance in complying with regulations and financial standards, which in turn has helped private sector companies to contribute and be competitive in businesses, the Prime Minister added.
He revealed that the Government was in the process of setting up a new bank to provide development finance next year to strengthen local companies.
“We will have the Treasury, the three state banks as stakeholders. The Government and the Governor are now talking to the Asian Development Bank (ADB) to come in as a stakeholder. We are asking all the main commercial banks to become stakeholders so that we don’t have to run separate offices. The different stakeholder banks will then do the work, enabling development capital for the private sector.”
At the initial stage, he said the Government expected to disburse around Rs. 30 billion-Rs. 35 billion for the development activities of private companies, in addition to their own money.
“Many of you all work with foreign investors; some of the companies are joint venture with foreign investors.”
The Premier noted that the Government still had the difficult task of listing its total debt and finding exactly how many repayments had to be made.
“To start with the Central Bank, we now have to work out how much did we borrow, how much did we take by private placements, how many of those private placements were authorised, how many were not authorised,” he said, adding that on private placements and national debts alone Sri Lanka had about Rs. 4.5 trillion in debt.
He estimated that with the interest rates, total debt repayments could add up to about Rs. 7 trillion. “Since we are not in a position to repay all this at the end of the period, we have rescheduled and taken loans. At the end, the final cost after 40 years will be Rs. 10 trillion-Rs. 12 trillion,” he explained.
The unexpectedly high debt burden was described as a surprise by Wickremesinghe. “My parents always taught me that I must repay whatever debt we have. Such good practices have never gone into the Central Bank at that time,” he said, referring to the previous Government under former President Mahinda Rajapaksa, “but I must say that the Monetary Board and the Governor are now ensuring there is good financial reporting.”
Noting that the Government was bringing in laws to ensure that it could pay its own debts, he said a new Liability Management Act would be introduced and the State would bring in amendments to the Financial Responsibility Act to ensure reporting to Parliament.
“There was no financial obligation made in respect of many of the projects. In our first month alone in office we found that the bill for roads was about Rs. 100 million more than what was forecasted and given to us. In terms of SriLankan Airlines, the Government has not guaranteed any loans and therefore, legally we have no responsibility for whatever happens to the airline. But about $ 400 million has been given by the Bank of Ceylon and People’s Bank, so at some stage we have to step in. What we are doing now is to ensure that our financial reporting is in order,” he emphasised.
He assured that the Government, in line with all its institutions, was working hard to create a stable environment to support the private sector to invest and expand its businesses.
Citing the Annual Report performances, he said the Monetary Board and the Central Bank Governor Dr. Indrajit Coomaraswamy were now ensuring good financial reporting in the industry and commended the International Monetary Fund (IMF) for its assistance in helping Sri Lanka to get “its books in order.”
In addition to the Committee of Public Finance, the Prime Minister said they were in the process of setting up a Parliamentary Budget Office which would operate independently to make its evaluations on public finances.
