Govt. to introduce new bankruptcy laws

Thursday, 12 May 2016 00:24 -     - {{hitsCtrl.values.hits}}

  • Prime Minister’s Cabinet paper to amend Insolvency Ordinance approved 
  • Effort to leapfrog up the World Bank’s Ease of Doing Business rankings and reform loss-making SOEs  

By Uditha Jayasinghe

Cabinet has given the green light for a proposal by Prime Minister Ranil Wickremesinghe to introduce new bankruptcy laws in Sri Lanka to enhance Sri Lanka’s economic environment and enable it to climb the World Bank’s Ease of Doing Business index.

The new laws will be introduced by amending the Insolvency Ordinance No.24 of 1884 and also noted as being important for reform of loss making State owned enterprises, according to the Cabinet paper.  

“It has been witnessed that provisions of the Insolvency Ordinance No 24 of 1884 are not sufficient in dealing with issues related to enterprises that have faced difficulties. Moreover, the need of new laws related to bankruptcy has aired for reform of public enterprises,” said the Cabinet paper submitted by Prime Minister Wickremesinghe.  

“If suitable and productive laws are being implemented to take action in bankruptcy situations, Sri Lanka would gain a higher rank in the ease of doing business Index,” it added.Additional details were not released to media at the weekly Cabinet briefing but Cabinet Spokesman Dr. Rajitha Senaratne said the new regulations would “meet modern corporate requirements”.

Sri Lanka has been ranked 107 in the latest World Bank ‘Doing Business 2016’ index, indicating an improvement in the overall business environment.

The index, which measures the ease of doing business in 189 different countries, placed Sri Lanka at the 107th rank out of 189 countries in terms of ease of doing business for the year 2016. 

In 2015, the country was at the 99th place, which was later revised down to 113 in the latest DBI report for 2015/16. There was a full re-ranking and revision, following which Sri Lanka has, again, moved up six places from 113 to 107.

COPE Chairman appeals for more power

  • Says committee needs to take immediate legal action in upcoming SOE investigations

Committee on Public Enterprises (COPE) Chairman MP Sunil Handunnetti will make a request to the Speaker for more Parliamentary authority to initiate immediate legal action on investigations of State Owned Enterprises (SOEs). 

Handunnetti told reporters he would lodge a request as soon as possible before Speaker Karu Jayasuriya to obtain more powers for

According to the Chairman, even though COPE can give recommendations to a SOE, the relevant Minister has more power to impede the orders of COPE. Therefore Handunnetti said there was no point to COPE if it had less legal powers and lacked the capacity to push for more transparency.    

COPE will seek the advice of the Attorney General over the next few weeks to increase investigations of financial mismanagement and wastage of SOEs.

Central Bank Annual Report goes to P’ment

The latest Annual Report of the Central Bank will be tabled in Parliament, after it received Cabinet approval yesterday by Prime Minister Ranil Wickremesinghe. 

The presentation will be done by the Prime Minister in his capacity as the Minister of National Policies and Economic Affairs. He also presented the Annual Report of the Central Bank of Sri Lanka that includes, the state of the economy, account activities of the Central Bank, major administrative provisions adopted according to the finance policy in the last year, adopted laws and statistics to the Cabinet of Ministers. The Cabinet of Ministers then approved to submit it before parliament.

The Annual Report was presented to President Maithripala Sirisena last month.