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CSE, SEC revise corporate governance rules to drive capital market forward.

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By: Staff Writer

Colombo (LNW): The Colombo Stock Exchange (CSE), along with the Securities and Exchange Commission of Sri Lanka (SEC), revised the corporate governance rules for the listed entities after 16 years.

These revised rules are applicable to companies listed on the main market segment, i.e. the main board, diri savi board and catalyst board, from 1 October 2023, subject to certain transitional provisions.

Corporate governance rules are quite significant for listed companies as they play a crucial role in ensuring transparency and accountability and enhancing trust and credibility of the company.

The revised corporate governance rules of the CSE were formulated in line with global best practices and will go a long way in enhancing investor confidence in the capital market.

The new rules would attract more investors to the stock market and also create a more welcoming eco system for the companies to list on the stock exchange.

These rules are aimed at promoting responsible, ethical and transparent business practices, which would reduce the cost of capital for listed companies and contribute to their long-term sustainability.

When formulating the revised rules, the SEC and CSE conducted several public consultations from 2021 to 2023 and considered the views received therefrom in formulating the rules.

Some of the key changes introduced via the new corporate governance rules include specifying a minimum number of directors and independent directors for listed entities, appointment of a ‘Senior Independent Director’ in certain specific instances.

The other changes are urge establishment and operationalization of a nomination and governance committee, change in the composition and functions applicable to the audit, remuneration and related party transaction committees.

Measures will be taken for introduction of fit and proper criteria for Board members and CEO, changes to determine the criteria for ‘independence’, additional disclosure requirements on governance-related matters etc.

Several listed companies have commenced compliance with the new corporate governance rules, well ahead of the timelines specified in relation to some of the new requirements and have been actively engaged with the CSE and SEC on connected matters.

The revised corporate governance rules are not applicable to the companies listed on the empower board.

The CSE, in collaboration with SEC, conducted a series of awareness sessions on the revised corporate governance rules for the listed companies in the Banking sector, Insurance sector (with the Insurance Regulatory Commission of Sri Lanka), and other industry sectors.

SEC Chairman Faizal Salieh delivered the keynote address and CSE Chief Regulatory Officer Renuke Wijayawardhane made the detailed presentation of the rules of these sessions.

Senior officials of the CSE also presented the new corporate governance rules at several seminars/awareness sessions held by other organizations, enabling the listed entities and the relevant stakeholders to gain much-needed knowledge on these rules.

Parliament Committee Strives to Resolve Issues in Aswasuma Benefit Scheme Implementation

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The Committee on Ways and Means of Parliament convened to discuss the execution of the second phase of the Aswasuma Benefit Scheme, exploring the potential involvement of Samurdhi Development Officers. Chaired by Member of Parliament Patali Champika Ranawaka, the meeting gathered officials from key government institutions, including the Samurdhi Development Department and Welfare Benefits Board, alongside representatives from professional associations of Samurdhi Development Officers.

The initial phase encountered obstacles when Samurdhi Development Officers declined participation, leading to the assignment of responsibilities to Grama Niladhari officers. However, issues regarding their service constitution and allowances hindered their involvement, necessitating the engagement of apprentice officers and subsequently causing practical challenges, as highlighted by the Committee’s Chairman.

The Committee underscored the importance of leveraging Samurdhi Development Officers, specifically appointed for village-level social welfare activities, for the successful implementation of Aswasuma’s second phase.

Acknowledging the absence of legal barriers, the Chairman advised initiating beneficiary surveys, prioritizing poverty as a determining factor over education and health criteria. Additionally, he stressed the significance of incorporating electricity bill assessments to establish an undeniable and robust poverty measurement framework.

MP Ranawaka inquired if Samurdhi Development officials were prepared to contribute to accurately cataloging the impoverished. While the officials expressed willingness, they cited concerns under Sections 21 and 22 of the Welfare Benefits Act No. 24 of 2002, urging the removal of potential legal repercussions for acting on false information during duty performance.

Responding to this, Chairman Ranawaka reassured that officers had not faced issues with these clauses in the Act previously. He proposed options including amending the Act, formal written agreements, or trust-based responsibilities aligned with the nation’s needs.

While advocating for legal amendments, Samurdhi officials stressed the necessity for a statutory resolution. Consequently, the Committee expressed its intent to reiterate previous recommendations to the Finance Ministry to amend Sections 21 and 22 of the Welfare Benefits Act No. 24 of 2002.

State Minister Anupa Pasqual and MPs Dayasiri Jayasekara, Ashok Abeysinghe, S.M.M. Muszhaaraff, and Nalaka Bandara Kottegoda were among the attendees, signifying a concerted effort to resolve challenges hindering the Aswasuma Benefit Scheme’s effective implementation.

SC Approval to Destroy 100 Kilos of Narcotics Highlighted in Parliamentary Committee Meeting

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During a recent meeting of the Select Committee of Parliament convened to address the eradication of the drug menace in the country, the Justice Ministry disclosed that the Supreme Court has granted permission to destroy 100 kilograms of narcotics. Set dates for the destruction of these drugs were also established, marking a pivotal step in combating drug-related issues.

Chaired by Public Security Minister Tiran Alles, the committee discussed proposals and public feedback received from government institutions on immediate measures to control and eliminate the drug menace. All institutions and attendees were provided with copies of these submissions, emphasizing the need for comprehensive analysis and discussion.

In a presentation by the Attorney General’s Department, existing gaps and challenges in the arrest and judicial process concerning drug use and distribution were highlighted. The committee acknowledged that due to deficiencies in the current judicial process following drug-related arrests, even major drug traffickers evade legal consequences. This spurred discussions on the necessity for appropriate policy and legal remedies to address these shortcomings.

State Minister Dr. Seetha Arambepola and Members of Parliament Jayantha Samaraweera, Dr. Upul Galappaththi, Buddhika Pathirana, Manjula Dissanayake, and Muditha Prishanthi were among those present at the meeting, indicating a concerted effort among various governmental bodies to confront this critical issue.

Gem Sri Lanka Trade Fair: Showcasing Treasures and Economic Opportunities

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The Gem Sri Lanka Trade Fair, scheduled from January 11 to 13, 2024, at the luxurious Cinnamon Bentota resort in the Southern Province, stands as one of the region’s significant business events post-COVID. Organized by the Chinafort Gem & Jewellery Traders Association (CGJTA), the event has garnered support from various ministries.

CGJTA Vice Chairman Rizwan Nayeem revealed that besides attracting gem buyers globally, the fair has enticed billionaires from China, signifying its international allure. Global buyers from the USA, Europe, and China, including delegates from China, have confirmed participation. With over 60 booths exhibiting local gems and crafts, the event promises to showcase Sri Lanka’s rare and exceptional gemstones.

Emphasizing the event’s significance as a platform for global exposure, Nayeem highlighted collaboration with the tourism sector to amplify mutual benefits. Regional high-end hoteliers have partnered to provide accommodation and services, fostering symbiotic growth.

Moreover, the fair intends to spotlight budding talent on an international stage. Marketing Manager Infas Iqbal noted strategic partnerships with global gem and jewelry influencers, aiming to spotlight Gem Sri Lanka and Sri Lanka Tourism through extensive global promotions.

Beyond cultural significance, the fair aims to bolster Sri Lanka’s economic growth by tapping into lesser-explored international markets and boosting transactions from foreign and local buyers. Leveraging social media platforms, organizers aim to expand outreach, highlighting Gem Sri Lanka’s treasures and the country’s scenic wonders.

Endorsed by key authorities such as the National Gem and Jewellery Authority (NGJA), the Export Development Board (EDB), and the Sri Lanka Tourism Promotion Bureau, the event holds substantial promise. Johan Aschan, the newly appointed General Manager of Cinnamon Bentota, affirmed the hotel’s dedication to ensuring the event’s success, emphasizing free entry for visitors and a specially allocated space within the hotel premises for the fair.

SJB Excludes Corruption and Racism Accused from New Alliance, Asserts Dr. Harsha de Silva

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In a press conference held at the Opposition Leader’s office, Member of Parliament Dr. Harsha de Silva affirmed that the forthcoming broad political alliance formed by the Samagi Jana Balawegaya (SJB) would not encompass individuals tainted with allegations of corruption or racism.

Dr. de Silva emphasized that the alliance seeks individuals aligned with the SJB’s policies and economic framework. He stressed the invitation for those in agreement with their principles to join the initiative, emphasizing a commitment to a more equitable tax system that does not further burden the public. He clarified that while the SJB advocates for necessary economic reforms, their stance opposes unreasonable tax imposition, advocating for a fairer approach to taxation.

Today’s Dollar Rates in Sri Lanka – December 20

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The Sri Lankan Rupee has maintained its stability against the US Dollar at commercial banks compared to Tuesday’s rates.

At Peoples Bank, the US Dollar’s buying and selling rates stand steady at Rs. 321.18 and Rs. 332.38, respectively.

Commercial Bank reports a slight increase in the buying rate of the US Dollar, rising from Rs. 319.75 to Rs. 320.62. However, the selling rate remains unchanged at Rs. 330.75.

Meanwhile, Sampath Bank has seen no change in its US Dollar rates, with both the buying and selling rates remaining constant at Rs. 322 and Rs. 331, respectively.

STF Arrests Over 2,000 Suspects in Islandwide Drug Crackdown

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In a concerted effort to combat the drug menace in Sri Lanka, the Police Special Task Force (STF) conducted an islandwide special operation resulting in the arrest of 2,296 suspects within the last 24 hours, as confirmed by the Ministry of Public Security.

The operation, spanning the past weekend, saw a total of over 6,000 suspects apprehended. Notably, the STF seized significant quantities of narcotics, including 1.1 kilos of heroin, 648 grams of ICE, 126,060 cannabis plants, and 19,507 narcotic pills.

Additionally, the STF seized eight vehicles valued at nearly Rs. 68 million, believed to be owned by drug dealers, as part of the crackdown.

These widespread operations signify a proactive approach by law enforcement agencies to curb the proliferation of drugs across the nation. The concerted efforts aim to address the pressing issue of drug trafficking and its associated criminal activities within Sri Lanka.

Sri Lanka Unveils Cutting-Edge Disaster Early Warning System

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Under the patronage of President Ranil Wickremesinghe, Sri Lanka launched a state-of-the-art disaster early warning system on December 19. The initiative, a collaboration between the Disaster Management Centre (DMC), the Telecommunication Regulatory Commission of Sri Lanka (TRCSL), and major telephone service providers like SLT Mobitel, Hutch, Dialog, and Airtel, was formalized with the signing of a Memorandum of Understanding (MoU) at the President’s Office.

The MoU, inked by DMC’s Director General Major General (Retired) S. Ranasinghe and TRCSL’s Director General Madhushanka Dissanayake, marked a pivotal step in fortifying the country’s disaster response infrastructure.

Key figures from telecom giants, including Supun Weerasinghe of Dialog Axiata, Janaka R. Abeysinghe of SLT, Ashish Chandra of Bharti Airtel Lanka, Sudarshan Giganage of Mobitel Pvt. Ltd., and Samitra Gupta of Hutchison Telecommunications Lanka Pvt. Ltd., were actively involved in the ceremony, signaling a united effort toward bolstering disaster preparedness.

This groundbreaking system aims to enhance citizen safety during various disasters, leveraging cutting-edge technology to provide more effective early warnings through telephone networks. Initially focusing on tsunami disasters, the system targets around 60,000 mobile and landline numbers across 14 high-risk districts. It will issue immediate warnings through a distinct “Ring Tone” notification coupled with a siren sound, significantly improving nighttime alert effectiveness.

Set for a public rollout on “National Security Day” on December 26, 2023, the system’s scope is projected to expand. Future enhancements will incorporate warnings for landslides and floods, elevating its comprehensive disaster response capabilities.

The high-profile launch saw the presence of esteemed dignitaries, including State Minister for Defence Pramita Bandara Thennakoon, President’s Senior Advisor on National Security and Chief of Presidential Staff Sagala Ratnayake, Secretary to the Defence Ministry General Kamal Gunaratne (Retired), and key officials from the Disaster Management Centre, Brigadier T.C. Harasgama, and Mr. Pradeep Kodippili, among others.

Sri Lanka Original Narrative Summary: 20/12

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  1. Govt sources say significant amendments are to be made to laws of major State banks – Bank of Ceylon, People’s Bank, National Savings Bank, and State Mortgage Bank within the 1st quarter of 2024: plans to divest 20% of State stakes in BOC & PB to “selected depositors & employees”: also say Central Bank approval is currently being sought “to finalise these procedures”.
  2. Cardinal Malcolm Ranjith admits he asked former President Gotabaya Rajapaksa not to appoint Mohamed Ali Sabry as the Minister of Justice: also says he did so after a Buddhist monk informed him about the President’s move to do so.
  3. Ministry of Public Security says 2,166 persons have been arrested and 1.3 kgs of heroin, 7 kgs of cannabis, & 1,075 narcotic pills have been siezed during a 24-hour special operation.
  4. Cabinet grants approval to import 15,000 MT of Maize through the State Trading Corporation to meet the requirements for poultry feed production: also approves the import of 50,000 MT of GR11 rice variety which is similar to ‘Keeri Samba’ through the private sector.
  5. Acting IGP Deshabandu Tennakoon says 8 vehicles valued at Rs.68 mn belonging to drug dealers have been taken into custody by the Illegal Properties or Assets Investigation Division of the Police.
  6. Energy Minister Kanchana Wijesekara says a reduction in electricity tariffs will be made during the next price revision in Jan’24 as maximum hydro-power generation is being done currently.
  7. Colombo Stock Exchange and Securities & Exchange Commission revise the Corporate Governance rules for listed entities after 16 years: the revised rules to be applicable to companies listed on the main board, diri savi board and catalyst board, from 1st Oct’23 onwards, subject to certain transitional provisions.
  8. Ambassador of Russia in SL Levan S. Dzhagaryan says an estimated 200,000 Russian tourists are likely to visit Sri Lanka in 2024 and air connectivity too would be further strengthened.
  9. Prisons Commissioner Gamini B Dissanayake says the Dept had commenced installing CCTV cameras in buses that transport “special category inmates”: asserts this would help enhance security and enable the authorities to prevent “contraband” entering prisons.
  10. SL fast bowler Nuwan Thushara bought by “Mumbai Indians” for INR 48mn at the IPL-2024 auction in Dubai: more fancied all-rounder Wanindu Hasaranga bought by “Sunrisers Hyderabad” for only INR 15mn: Australian fast bowler Mitchell Starc tops the list after being bought by “Kolkata Knight Riders” for INR 247mn.

Minister Affirms Unaffected January Electricity Tariff Amid VAT Increase

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Power and Energy Minister Kanchana Wijesekera has affirmed that the imminent revision of January’s electricity tariffs will remain unaffected by the recent Value Added Tax (VAT) hike. However, discussions arise on the likelihood of increased fuel prices shouldering the impact of this tax raise, sparking conversations about potential alternative measures to alleviate the consequent burden.

Addressing public concerns about the potential repercussions of the VAT hike on household expenses, Minister Wijesekera reassured the populace that the upcoming revision in January’s electricity bills will proceed as initially planned, devoid of any incorporation of the increased tax.

Despite apprehensions surrounding the price surge resulting from VAT adjustments, the Minister underscored the government’s steadfast commitment to ensuring an ample supply of fuel across the country. In light of previous fuel shortages experienced in Sri Lanka earlier this year, he vowed to undertake proactive measures to prevent any recurrence of such shortages in the future.