June 23, Colombo (LNW): A prominent Sri Lankan anti-corruption organisation has taken its concerns over a proposed amendment to company law to the nation’s highest court, warning that the reform threatens to entrench secrecy rather than promote transparency.
Transparency International Sri Lanka (TISL) lodged a public interest petition before the Supreme Court on June 19, 2025, challenging specific provisions within a government-backed Bill seeking to amend the Companies Act No. 07 of 2007.
At the heart of the legal challenge lies Clause 7 of the draft legislation, which proposes the creation of a Beneficial Ownership Information (BOI) register — a tool designed to expose the individuals who truly own or control corporate entities.
Whilst the stated purpose of the BOI register is to advance corporate transparency and counter financial crimes, TISL argues that the version laid out in the draft Bill does the opposite. Rather than enabling public scrutiny, the proposed system introduces significant limitations on access to ownership information, thereby frustrating efforts to detect corruption and illicit financial activity.
The organisation maintains that opaque business structures are routinely exploited to hide wealth, facilitate illegal transactions, launder money, and advance foreign interference and organised crime.
Against this backdrop, TISL insists that a robust and publicly accessible BOI framework is essential, particularly as Sri Lanka continues to recover from its recent political and economic crises.
Despite the government’s commitments under the Governance Action Plan 2025 and the National Anti-Corruption Action Plan for 2025–2029 — both of which pledge to establish an open, searchable online register — the Bill currently under consideration fails to deliver on these promises.
TISL is particularly critical of Section 130A(6), which merely instructs the Registrar of Companies to keep an internal list of beneficial owners, with no requirement for digital publication or coordination with other public data systems. Furthermore, Section 130D restricts the release of information to just the name of the owner and the nature of their control, and even then, only upon individual request.
This request-based model, TISL contends, is cumbersome and time-consuming, and would deter journalists, investigators, and civil society from accessing critical information in a timely manner.
The watchdog further argues that such a system runs counter to global best practices, citing international recommendations — including the 2023 IMF Governance Diagnostic Assessment — which advocate for open, verifiable registers as a central element of effective anti-corruption policy.
TISL’s petition calls on the Supreme Court to rule that Clause 7 of the proposed amendment conflicts with the Constitution, specifically Article 12(1), which ensures equality before the law, and Article 14A, which guarantees the public’s right to information. Whilst acknowledging the inclusion of the Right to Information framework in the draft law as a step in the right direction, TISL warns that the lack of proactive disclosure will weaken oversight, hamper asset recovery efforts, and diminish public trust.
