By Duruthu Edirimuni Chandrasekera
Questions are being raised by stakeholders on the bureaucratic red tape and general lethargy by the employees of the Department of Registrar of Companies (DRC) who in turn, blame issues on the new IT systems at the department.
A myriad of issues are plaguing this institution, where the delays in incorporating companies stand foremost and the organisation is currently headless.
Six years ago, the DRC deployed KPMG to digitalise its functions with a Rs. 35 million project. KPMG managed to digitalise and computerise the functions in phase one of the eRoC system project in 2018. By 2021 the DRC was completely automated, becoming the first 100 per cent paperless government organisation in the country, eliminating bribery and corruption.
Unravelling some of the issues, Ganesh Wijenayake, Consulting Project Manager KPMG e Registrar of Companies Project (eRoC) told The Sunday Times Business that there are no major issues with the system now. “This was awarded two prestigious gold awards at the National Project Management Excellence Awards in 2023. The real problem in delays in servicing the public is the lethargic approach of one or two officers who manage incorporations as well as huge delays in Public Contract Registrations. As of the end of the day (September 19) over 630 incorporations are pending. The system is capable of completing the entire incorporation process within a day but the lethargic attitude of a couple of officers creates panic at the DRC.”
Since July 7, the current Registrar General of Companies (RGC) from the Industries Ministry has been absent, complicating the Department’s operations and Companies Act No 7 of 2007 regulations, Mr. Wijenayake noted adding that from 1938 until the system was introduced in 2018 the companies incorporated in Sri Lanka were less than 96,000. Sri Lanka’s paperless system, introduced in 2018, has incorporated over 110,200 companies, registered over 223,000 annual returns, and generated over Rs. 4.7 billion in revenue for the Department of Revenue.
“At the beginning of this year, the former RGC transferred over 22 senior staff members without replacements nor succession training programmes for newcomers. Apart from the non-trained staff, the required vacancies were not filled,” Mr. Wijenayake said.
Company secretaries in the DRC are experiencing delays in registering companies due to internal administrative issues and bureaucracy. Some staff is unable to register online due to system issues in the new system. Jayasanka Perera, a Company Secretary, said that more than six years ago, everything was done manually. Now their ‘work arrangements’ have changed. “This delay is a big issue for us due to this,” he said.
Before the earlier mention of transfers, the incorporation time of a company was one day or a maximum of two days if all the details were correct, Mr. Wijenaike noted. Form 15 backlogs were less than 300 which is almost the daily submission rate.
Both Mr. Wijenayake and Mr. Perera said that public visits have been limited to one day, per week. “We can only go to DRC on Wednesday,” Mr. Wijenayake noted, adding that the issues related to data migration from old physical files do cause some issues which are corrected within a day or two. He also noted that for the first time in the country, the instant issuance for certified copies and file searches for documentation are provided through this system.
ROC has issued about 220,000 online certified copies with real-time validation. Before this system, it took weeks or months to obtain a certified copy against the instant issuance.
“This eROC project failed a few times before KPMG took over and the Government has lost more than Rs.13 million due to ignorance in project management. These forces are still active and trying to sabotage this valuable project by causing problems, delaying work, and introducing unwarranted procedures to create public hate against this system,” Mr. Wijenayake alleged.
Several attempts at contacting the DRC management by The Sunday Times business failed on both Thursday and Friday.
Source: Sunday Times
