An Echelon Media Company
Monday December 11th, 2023

Angry Sri Lankan protestors demand arrest of ex-minister Johnston Fernando

ECONOMYNEXT – A protest calling for the arrest of Sri Lanka’s former Highways Minister Johnston Fernando took place outside the Criminal Investigation Department (CID) headquarters in Colombo on Tuesday (24).

The minister was being questioned at the CID over his alleged involvement in government-backed violence unleashed on peaceful protestors on May 09 which led to retaliatory mob violence around the country.

Barricades were put up near the CID building, and police and the armed Special Task Force (STF) personnel stood guard. The surrounding roads were also barricaded and guarded, leaving office workers little space to get to the main road and catch a bus home. The panic was palpable. People did not want to be present for a rehashing of May 09 or ‘Black Monday’, as it has come to be known.

Most of the protesters at York Street had been present during the assaults on May 09, and were sporting bandages and casts. While happy to speak to the media, they were wary of giving names as they felt targeted for exercising their basic rights. Some were wearing homemade protective gear, apprehensive of a tear gas or water cannon attack.

Viraj, who has been active at the Gotagogama protest site in Colombo speaking to EconomyNext said:  “They beat up the youth. Now the police are protecting thieves. Is this what is meant by ‘one country one law’? Do the police have no shame? All these people must be arrested. We have been protesting for 46 days, and we will continue to do so.”

Minister Fernando is one of 22 individuals whose arrest has been called for by the Attorney General in connection to Black Monday. So far over 1,000 individuals have been arrested.

Fernando in particular provoked the ire of the public by his comments on the anti government protests when they first began some weeks prior to May 09/

“The problem is that the government is too lenient. If we kill one crow (said in reference to the anti-government protestors) and hang up their wings this will all end,” he said earlier this year. He was also filmed provoking the pro government crowd at Temple Trees on the morning of May 09 who had arrived for an event to ask then Prime Minister Mahinda Rajapaksa to not resign.

“There is something called Mynagogama in front of Temple Trees. Today, we will end that. Get ready. We will start the war!” he exclaims, moments before the attacks that led to the assaults on protestors who had until then been peaceful.

The aftermath of the attack on the Galle Face protestors was widespread violence that lasted well into the night, with houses of ruling party MPs being looted and burnt. SLPP supporters including musician Iraj Weeraratne were also allegedly targeted. Mobs burnt down the home and buildings belonging to Gnana Akka, the President’s personal shaman. The pro-government mob that launched the initial attack was rounded up and roundly beaten up, while some where pitched into the Beire Lake along with burnt buses and other vehicles. At least one of the government supporters succumbed to his injuries a few days ago.

Although reconstruction of the Gotagogama protest sites began almost immediately after the attack, crowds have lessened noticeably. Before the attack, there would easily be at least 500 protestors at any given time, but now it’s a fraction of that number. Protestors say that the rising cost of living and the dire situation of the country is forcing people to stay at home. Some protestors say that United National Party (UNP) leader Ranil Wickremesinghe’s appointment as Prime Minister has sent away the UNP supporters, a massive blow to protests that were supposed to be non partisan.

As the crowd in York Street grew, and the protest chants grew louder, water cannons werre brought in. Footage showed a scuffle where protesters were breaking down the barricades. Meanwhile, after a five-hour statement, Fernando quietly exited the building through the backdoor. (Colombo/May25/2022)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka’s Singer Finance rating cut to BBB (lka), outlook stable: Fitch

ECONOMYNEXT – Fitch Ratings has downgraded the national long-term rating of Sri Lanka’s Singer Finance (Lanka) Plc to ‘BBB (lka)’ from ‘BBB+(lka)’.

This rating is a support driven rating and therefore this downgrade follows similar rating action on SFL’s parent, the company said in a statement.

Its senior listed rated unsecured debentures of Rs 5 million issued on May 19, 2020 were also revised down from BBB+ ro BBB; and subordinated listed rated unsecured debentures of Rs 2,000 million issued in June 25, 2021 were revised down from BBB- to BB+.

The full statement is reproduced below:

Fitch Downgrades Singer Finance to ‘BBB(lka)’; Outlook Stable

Fitch Ratings – Colombo/Mumbai – 07 Dec 2023: Fitch Ratings has downgraded Singer Finance (Lanka)
PLC’s (SFL) National Long-Term Rating to ‘BBB(lka)’ from ‘BBB+(lka)’. The Outlook is Stable. Fitch has also
downgraded SFL’s outstanding senior unsecured debt to ‘BBB(lka)’ from ‘BBB+(lka)’, and the outstanding
subordinated unsecured debentures to ‘BB+(lka)’ from ‘BBB-(lka)’.


Parent’s Weakening Ability to Support: The downgrade follows similar rating action on SFL’s parent, consumer-durable retailer, Singer (Sri Lanka) PLC (A(lka)/Stable), on 29 November 2023. SFL’s rating is
based on our expectation of support from Singer, taking into account Singer’s 80% shareholding in SFL, the
common brand name and a record of equity injections into SFL. As such, the downgrade reflects Singer’s
weakening ability to provide support.

Moderate Synergies: We believe SFL has limited synergies with Singer, as evident from SFL’s small share of lending within the group’s ecosystem. We also believe support from the parent could be constrained by
SFL’s significant size relative to Singer, as its assets represented 41% of group assets at end-September
2023. SFL’s operational integration with the group is also low, although the parent has increased its focus
on the subsidiary’s strategic long-term decision-making over the past few years and has meaningful
representation on SFL’s board.

Weak Standalone Profile: SFL’s intrinsic financial position is weaker than its support-driven rating. It has a small domestic vehicle-focused lending franchise and a high-risk appetite stemming from its exposure to customer segments that are more susceptible to difficult operating conditions.

Less Severe Economic Risk: We expect downside economic risk to moderate after Sri Lanka completed the local-currency portion of its domestic debt optimisation, which addressed one element of risk to financial
system funding and liquidity. We expect the operating environment to remain challenging in light of
strained household finances and fragile investor confidence, but conditions should stabilise with a gradual
economic recovery amid easing inflation and interest rates.

Vehicle Loans Remain Dominant: SFL’s business model is dominated by vehicle financing, which accounted for 69% of its lending portfolio as at end-June 2023. Gold loans have been growing at a faster rate in the last few quarters, reaching 28% of SFL’s portfolio, amid lower demand for vehicle financing. However, we
do not expect a major change in SFL’s vehicle-focused business mix in the medium term, given its more
established franchise in this segment.

Weak Asset Quality: SFL’s reported stage 3 assets ratio rose to 11.9% in the financial year ending March 2023 (FY23), from 6.6% in FY22, on weaker collections in its core vehicle loans segment as well as implementation of a stricter stage 3 recognition rule. We expect asset quality to remain stressed in the
medium term, due to the weak economic environment. Nonetheless, loan collections could increase as
borrower repayment capability improves, provided the economy gradually stabilises with declining
inflation and interest rates.

Profitability to Recover, Leverage Rising: We expect SFL’s net interest margin to gradually recover in the medium term amid a declining interest-rate environment. This, along with a potential pick-up in loan
growth, should support earnings and profitability, but a strong loan expansion in the medium term could
pressure leverage.

Pre-tax profit/average total assets declined to 3.1% in FY23, from 4.5% in FY22, due to a sharply narrower
net interest margin of 9.4%, against 12.7% in FY22. This followed a surge in borrowing costs due to rising
interest rates. SFL’s debt/tangible equity reached 5.4x by end-September 2023, from 5.1x at FYE22.

Improved Funding and Liquidity: SFL’s share of unsecured deposits/total debt swelled to 80% by end September 2023, from 52% at FYE22, supported by a greater focus on raising deposits. SFL’s increased
cash and cash equivalents from deposit raising and reduced lending mitigated near-term liquidity pressure.

Liquid assets/total assets rose to around 27% by end-September 2023, from 8% at FYE22, as SFL boosted
its investments in liquid assets amid fewer lending opportunities.


Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

SFL’s rating is sensitive to changes in Singer’s credit profile, as reflected in Singer’s National Long-Term Rating.

Singer’s weaker ability to provide support to SFL, as signaled through a further downgrade of its rating,
SFL’s increased size relative to Singer that makes extraordinary support more onerous or delay in
providing liquidity support relative to SFL’s needs due to economy-wide issues could also lead to negative
rating action on SFL.

The ratings may also be downgraded if we perceive a weakening in Singer’s propensity to support its
finance subsidiaries due to weakening links. That said, SFL’s standalone credit profile could provide a floor
to the rating.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

A significant positive turnaround in Singer’s financial prospects or increase in SFL’s strategic importance to Singer through a greater role within the group could lead to narrower notching from Singer’s profile. A large improvement in SFL’s intrinsic credit profile could result in its ratings been derived from its standalone profile.



The rating on SFL’s senior unsecured debt is in line with the National Long-Term Rating, as the debt
constitutes the unsubordinated obligations of the company.


SFL’s Sri Lankan rupee-denominated subordinated debentures are rated two notches below its National
Long-Term Rating to reflect their subordination to senior unsecured obligations. Fitch’s baseline notching
of two notches for loss severity reflects our expectation of poor recovery. There is no additional notching
for non-performance risk.

SFL’s senior unsecured debt and subordinated unsecured debt ratings will move in tandem with the
National Long-Term Rating.

The principal sources of information used in the analysis are described in the Applicable Criteria.

SFL’s rating is driven by Singer’s National Long-Term Rating.

Continue Reading

Sri Lanka’s ousted utilities regulatory chief convinced he’ll be president

ECONOMYNEXT — Sri Lanka’s former public utilities regulatory chief Janaka Ratnayake, who was removed in May following a parliamentary vote, has confirmed that he intends to run for president.

Speaking to reporters on Sunday December 10 in the wake of an hours-long island-wide power outage the previous evening, Ratanayake said he will be the definite winner at a future presidential poll.

“I announced [my intention to run] officially on December 07, my birthday. I’m definitely coming as a presidential candidate. That’s not all, I’m the definite president at a future presidential election,” he said.

Ratnayake, in his first media appearance in months, was responding to questions about newspaper advertisements published on December 07 announcing his future candidacy.

Sri Lanka’s parliament on May 24 opted to remove the former chairman of the Public Utilities Commission of Sri Lanka (PUCSL), with 123 members voting in favour. This marked the first time a head of an independent government commission was sacked by Sri Lanka’s parliament.

Power & Energy Minister Kanchana Wijesekara, who had been at loggerheads with the regulatory chief, said at the time that the official had acted obstinately without the concurrence of fellow commission members.

The minister levelled five charges against Ratnayake, the first twoof  which were based on a February 10 verdict by the Court of Appeal rejecting an application filed by the offiical against an electricity tariff hike. Opposition legislators slammed the decision saying it undermined independent commissions.

Ratnayake’s presidential ambitions have been known for some time. A day before parliament voted to remove him, he told reporters: “If I can change the country, I will definitely join politics, because my intention is to serve the people and what is right.”

Ratnayake had blocked delayed a tariff hike in early 2023, resulting in losses to the state-run Ceylon Electricity Board (CEB), Minister Wijesekara claimed at the time. The PUCSL had als onot enabled tariff hikes for nine years, requiring its governing law to be changed, Wijesekera said.

Continue Reading

Sri Lanka wants university research to lead to commercially viable products

ECONOMYNEXT – Sri Lanka’s ministry of industries wants to ensure commercially-ready products and services are produced by university research, by facilitating partnerships with factories and entrepreneurs.

After a currency crisis, Sri Lanka’s government is in a drive to boost its trade balance by increasing exports.

“Our export basket hasn’t changed recently, partly because our small and medium entrepreneurs don’t have sufficient research and development facilities (like the multinationals) to innovate their products for the export market,” Additional Secretary of the Ministry of Industries, Chaminda Pathiraja said.

“At the same time, state universities and research institutes produce a large amount of research findings yearly, which end up sitting in those institutions; they don’t reach the industry,” Pathiraja said at a press briefing to announce a program on commercialization of new products and research, to be held tomorrow at the Waters Edge.

The networking forum will bring innovators and manufacturers together to focus on the commercialization of research for the value added tea, coir, spice, dairy products, gem and jewellery and packaging products industries.

“We want to encourage collaboration, through programs like our University Business League etc, so that the research output can be commercialized, and what is produced by our factories can increase in quantity and quality. We must focus on the export market.”

The objective of this program, he said, was to reduce the gap in acquiring innovators’ ideas and skills by the investors, and ultimately boost the manufacturing sector’s efficiency in alignment with the export market.

Continue Reading