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Sri Lanka to sell-down SOEs through stock market: Eran

Mar 13, 2017 08:02 AM GMT+0530 | 3 Comment(s)

ECONOMYNXT - Sri Lanka would use the stock market infrastructure to sell down stakes in state-owned enterprises, which will enhance transparency, after political consensus has been achieved within the ruling coalition, Deputy State Enterprises Minister Eran Wickramaratne said.

"Actually, we have set in place the process to market some of these institutions that are completely owned by the government," Wickramaratne said. "We may want to release shares in stages, and hold on to a portion of it."

Wickramaratne said a formula to give shares to longstanding employees is also being considered.

Sri Lanka's Prime Minister Ranil Wickremesinghe and Finance Minister Ravi Karunanayake has said repeatedly that 'non-strategic' SOE including hotels and hospitals will be sold.

Such selloffs can fast-track domestic and foreign direct investment, and signal that Sri Lanka has changed tack from the policies followed by the Rajapaksa administration, economic analysts say.

Critics say the current administration is now bogged down in Rajapaksa era policies of price controls, mis-using and expanding state enterprises, and had also slapped retrospective taxes, harming the investment environment the same way expropriation did in the last regime.

Meanwhile, Wickramaratne said political consensus within the coalition was key to taking the process forward.

"As the next step, a political decision will have to be made as to the special situation (involving the coalition government) as well as to the timing," he said. "That is a political decision. We will obviously reach an agreement."

Sri Lanka's Colombo Stock Exchange already has a mechanism to sell 'all-or-nothing' stakes. The state also controls several listed companies or has large stakes in them, such as Lanka hospitals.


 

3 Comments

  1. Sriy March 13, 09:28 AM

    Well, the boards would probably like to sell. It is the government that is blocking them. See what happened to Seylan Bank In any case it is better not have have politicians controlling these entities. They mis-use them for their benfit and build state empires.

  2. Giabao March 13, 09:00 AM

    B...s... I have no idea how come govt talks so much about these companies when most of them are not even owned by the govt. It is highly questionable how the govt assumes ownership of companies like Lanka hospitals, grand Hyatt, GOH, etc when they are in fact owned by independent insurance and pension funds or institutions. Whether to sell of not has to be a rational investment decision by relevant boards, etc.

  3. Nana March 13, 08:19 AM

    These are good initiatives, But This Govt will take a decade to Decide Deliver, Where as MR would have done it in 3 Months.Super gain tax was clearly illegal, But no shareholder went to courts.
    Even expropriation could be illegal.(If they didnt breach tearms of contract)No Country has developed after losing Private sector Investor confidence. It is more wrong to Tax private sector and build iddling State sector.Sahre market is down for almost 3 years, and that is a good sign that economy is sick.

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