SLC explains rationale for setting up Sri Lanka Cricket Asset Management Guarantee Ltd.

Sarath Ekanayaka speaks on behalf of the membership 

The Annual General Meeting of Sri Lanka Cricket was held yesterday where among other things a special resolution was adopted by the membership for the formation of Sri Lanka Cricket Asset Management Guarantee Ltd. 

The follow is the resolution which explains the rationale behind the decision.

Whereas pursuant to deliberations between the members of the Executive Committee (‘ExCo’) it has been decided that the activities and assets of Sri Lanka Cricket must be better managed for the purposes of better realisation of value for the stakeholders and the game of cricket in Sri Lanka; 

And whereas the ExCo has also seen the dire need for the governance and development of the game of cricket to be separated from the management of assets, which two functions are discharged by Sri Lanka Cricket at present and does not allow Sri Lanka Cricket to function purely and successfully as the governing body for cricket in Sri Lanka and focus its energies on the development of cricket as a game in Sri Lanka; 

And whereas, the ExCo has considered forming an Asset Management Company (‘AMC’) for the better management of the real assets of Sri Lanka Cricket, including, inter alia, the stadia owned by and/or leased to Sri Lanka Cricket and/or its members; 

And whereas, for that purpose the ExCo has retained the services of professional advisory firm KPMG, and they have, pursuant to a high level study of the assets and financial position of Sri Lanka Cricket, presented several options for the restructuring of the assets of Sri Lanka Cricket including options to form the AMC; 

And whereas, Sri Lanka Cricket has also obtained the legal advice of Nithi Murugesu and Associates, attorneys-at-law, and they have confirmed the legal viability of the various options for restructuring of the assets of Sri Lanka Cricket and the formation of the AMC; 

And whereas, pursuant to considering the options so presented, and pursuant to a study of the structure of various international cricket bodies including, inter alia, the International Cricket Council, the Asian Cricket Council and Cricket Australia, Sri Lanka Cricket has observed that these bodies have implemented a similar structure to that proposed: i.e. the formation of a dedicated AMC as a fully-owned subsidiary of the said cricket governing body to better manage and leverage its assets; 

And whereas, Sri Lanka Cricket has observed that inter alia, the following benefits could be achieved by forming a separate AMC: 

Better focus on the asset management function and performing it more efficiently 

The Board of Directors will constitute professionals and specialists who will have full powers to take necessary decisions in asset management 

However, full control will be retained by appointing a majority of Sri Lanka Cricket representatives to the Board of Directors. 

The AMC will have full legal right and capability to enter into contracts, to acquire and/or divest assets as they see fit and to develop various strategies to suit the varied types of assets, including leveraging on their locations, unique facilities, etc. 

The ability to take necessary action with regard to each asset, in a manner that will minimise the effect of the large liabilities incurred and calculated to resolve issues as to title of the assets, etc. 

Operating as a separate profit centre and generating additional revenue streams through the renting of grounds to regional cricket clubs and associations for regional cricket matches. 

And whereas Sri Lanka Cricket has also obtained the consent of the Hon. Minister of Sports, Hon. Dayasiri Jayasekara for the proposed restructuring, and has also referred the matter to the Attorney General’s Department for its approval, 

And whereas, in order to better govern cricket given the options presented by the professional advisors aforesaid, the ExCo has deemed the following steps to be appropriate and in the best interests of the future of Sri Lanka Cricket.

Representatives of the Sports Ministry, AG's Department, KPMG and SJMS and Attorneys of SLC 

A section of the membership 

Incorporating Sri Lanka Cricket as a Company Ltd/ by Guarantee under and in terms of the Companies Act No. 7 of 2007, which will give Sri Lanka Cricket the legal advantages of: 

Perpetuity and independent operation from the members and ExCo 

Separate corporate legal personality which allows the company to enter into beneficial con 

Better accountability and oversight through reporting to the Department of Registrar of Companies, public filing of annual returns and documents and strict control of directors’ powers and duties. 

Ensuring that all current and possible future members of Sri Lanka Cricket are included as members with the same proportionate voting rights that they enjoy, in the Sri Lanka Cricket Guarantee Company. 

Converting the current Sri Lanka Cricket constitution as the Articles of the aforesaid Sri Lanka Cricket Guarantee Company, in order to comply with the requirements of the Sports Law No.25 of 1973 (as amended) and ensuring that the entity is audited by the Auditor General as required thereunder. 

Incorporating the AMC as a fully-owned subsidiary of Sri Lanka Cricket Guarantee Company Ltd, with professional corporate management and representation of Sri Lanka Cricket to its board of directors, in order to retain control. 

Obtaining the approval of the members, by Special Resolution, of the proposed restructuring.