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Tuesday June 18th, 2024

Sri Lanka’s top listed firms ‘moderately’ transparent, anti-graft disclosure weak: TISL

ECONOMYNEXT – Sri Lanka’s top 50 listed companies were moderately transparent in corporate reporting, with John Keells Holdings leading the pack, but were poor in disclosing anti-corruption programs, the local chapter of a global watchdog said.

Transparency International Sri Lanka said the top publicly traded companies scored an average of 6.73 out of 10 in its first Transparency in Corporate Reporting (TRAC) report.

“The purpose of conducting this review is to really understand the way in which the largest corporate entities in the country are accountable to their stakeholders,” Asoka Obeyesekere Executive Director Transparency International Sri Lanka said.

“It also acknowledges the fact that they play a key role in improving the corporate governance in the country and reporting.

“The average score has been 6.73 out of 10 which illustrates that the top 50 listed entity in Sri Lanka is moderately transparent,” said Obeyesekere.

The top three most transparent companies were assessed to be John Keells Holdings, Seylan Bank with
Hemas Holdings, National Development Bank and People’s Leasing & Finance in third place with the same score.

All companies were at the very least ‘partially transparent’, with the lowest score being 4.33.

The report assessed the 2018/2019 annual report and any other publicly disclosed documents to score the companies across three areas.

They were assessed on, Reporting on Anti-Corruption Programmes, Organisational Transparency and Domestic Financial Reporting.

Transparency international had used the methodology to conduct TRAC reports worldwide since 2008.

The companies were the least transparent in ‘reporting on anti-corruption programmes’, with an average overall score of 27 percent.

Teejay Lanka was assessed to be the most transparent in the area scoring 69 percent while John Keells Holdings (65 percent) and Seylan Bank (62 percent) came in second and third places.

Companies had significant organisational transparency, with an average score of 86 percent while 31 companies were fully transparent in domestic financial reporting, with the average score across all 50 companies being 92 percent.

The report noted that a low score does not indicate wrongdoing, nor a high score proves strong disclosure.

TISL said it is beyond the capacity of the report to just the levels of within companies.

The report only focuses on public reporting by companies on anti-corruption policies and procedures and other disclosures on company holdings and key financial data, which TISL said is vital to ensure good governance and mitigation of corruption.

“A low score does not mean there has been any wrongdoing, but rather illustrates an opportunity for improvement in disclosure practices,” the report said.

“Likewise, a high score illustrates strong disclosure systems, but this may not reflect operational and implementation success…

“This report seeks to provide a basis upon which a broader discussion can commence on normalizing transparency in corporate reporting”.

One of the most important outcomes of the review is to ensure that senior management incorporates and strengthens already existing anti-corruption practices in their companies and makes this information publicly available, TISL. (Colombo/June19/2020)

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Sri Lanka’s Ceylon Chamber links up with Gujarat Chamber

ECONOMYNEXT – The Ceylon Chamber of Commerce has signed an agreement with the Southern Gujarat Chamber of Commerce and Industry (SGCCI) to increase trade cooperation between India and Sri Lanka.

The MOU was signed by CCC CEO Buwanekabahu Perera, SGCCI President Ramesh Vaghasia, in the presence of Dr Valsan Vethody, Consul General for Sri Lanka in Mumbai, India.

“With the signing of the MoU, … the Ceylon Chamber of Commerce and SGCCI aim to facilitate trade between the two countries via initiatives such as trade fairs and delegations, business networking events, training programmes,” the Ceylon Chamber said in a statement.

“This partnership will open doors for Sri Lankan businesses to explore opportunities in Surat’s dynamic market and enable the sharing of expertise and resources between the two regions.”

Established in 1940, SGCCI engages with over 12,000 members and indirect ties with more than 2,00,000 members via 150 associations. It promotes trade, commerce, and industry in South Gujarat.

The region’s commercial and economic centre Surat has risen to prominence as the global epicenter for diamond cutting and as India’s textile hub, and is ranked the world’s 4th fastest growing city with a GDP growth rate of 11.5%

Surat’s economic landscape is vibrant and diverse. As India’s 8th largest and Gujarat’s 2nd largest city, it boasts the highest average annual household income in the country.

The nearby Hazira Industrial Area hosts major corporations like Reliance, ESSAR, SHELL, and L&T. (Colombo/Jun18/2024)

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Sri Lanka telecommunications bill some clauses ruled unconstitutional by SC: Speaker

ECONOMYNEXT – Sri Lanka’s Supreme Court has found a number of clauses in a proposed amendment to the Telecom Telecommunications Amendment bill unconstitutional, speaker Mahinda Yapa Abeywardana said.

“Clause No 8, proposed section 9A 2 of the bill is inconsistent with Article 12 1 of the constitution, however this inconsistency shall cease if word ‘may’ will be replaced with word ‘shall’ as set out in the determination of the supreme court.”

“Clause No 9 is inconsistent with Article 12 1 of the constitution and only can be passed with special majority required under paragraph 2 of the Article 84. However, the inconsistency shall cease if clause is amended as set out in the determination of the supreme court.

Clause No 12, proposed section 17 10 of the bill is inconsistent with Article 12 1 of the constitution and can only be passed with special parliament majority required under Article 84 paragraph 2. However, the inconsistency shall cease if clause is amended as set out in the determination of the supreme court.”

Sections of clauses 13, 18, 20, 33 and 35 were also in violation of the constitution, and could only be passed by a special majority of parliament. (Colombo/Jun18/2024)

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Sri Lanka to exempt one house from imputed rent wealth tax: President

ECONOMYNEXT – Sri Lanka will exempt one house from a proposed wealth tax outlined in an International Monetary Fund program, President Ranil Wickremesinghe said.

About 90 percent of the people’s houses are likely to be exempt from the proposed tax, he said.

“[O]ne house will be exempt from this,” President Wickremesinghe told parliament Monday.

“It is going to have a very high threshold and I do not think the vast majority of the people in this country should even be worried about their house

“Don’t worry your house will be safe.”

The IMF program document however did not mention an exempt on one house, but did mention a threshold.

Taxing houses and thrift in general could have detrimental effects on people’s well-being housing stock and their willingness to remain in the country without migrating, critics say.

Related Sri Lanka to tax imaginary rents on houses under IMF deal

The mechanism of imputed rents was used because rates on houses was assigned to provincial councils and courts could strike it down.

Opposition legislator Harsha de Silva said the Samagi Jana Balwegaya welcomed President Wickremesinghe’s statement. (Colombo/June18/2024)

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