Chandra Jayaratne submits proposals for 2015 Budget
Monday, 28 July 2014 00:00
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Good governance activist and former Chairman of the Ceylon Chamber of Commerce Chandra Jayaratne has sent his submissions for consideration in the 2015 Budget.
This was in response to the Ministry of Finance and Planning’s public invitation for same.
Following is the full version of Jayaratne’s submission.
A proposal to make the 2015 Budget be in the national interest and lead to new development activities and investments, promoting growth, prosperity and livelihoods
In response to the publicly advertised invitation, it is proposed that the Budget 2015 lead to the establishment of a Company Law Reform Advisory Commission, with a mandate to recommend reforms required to the Companies Act and associated and ancillary legislative enactments and connected regulations.
The primary tasks of the Company Law Reforms Advisory Commission should be to revise, reform, update and bench mark with appropriate global best practices, the Companies Act and associated and ancillary legislative enactments and connected regulations, in order to achieve the objectives set here under and thereby satisfy the longer term expectations of the state, the corporate sector stakeholders and the stakeholder of society seeking sustainable growth, prosperity and livelihood opportunities via corporate sector operations in Sri Lanka and overseas.
The terms of reference of the Advisory Commission should inter alia set the objectives of the proposed reforms;
1. In encouraging company formation, in Sri Lanka and offshore, and
2. In facilitating effective operations and management of companies with enhanced efficiency, effectiveness and economy and thereby assure sustainable competiveness, enhanced growth and investments, and creating new livelihood opportunities, and
3. To facilitate good governance, due compliance, transparency.
These reform objectives should further bring out specific emphasis of the needs of the state;
1. In attracting new local and foreign investments, and
2. Encourage the bringing in of the informal sector to operate as corporatised entities, and
3. Attract further capital formation, and
4. Spur capital and debt market operations.
These reform objectives should also promote and safeguard the sustainable long term interests of all stakeholders.
Without dilution of the generality of above primary the objectives, the Commission should be inter alia be required to specifically address through the reform of the Companies Act, associated and ancillary legislative enactments and connected regulations or by new legislative enactments, the following law reforms linked or associated with an efficient, effective and well regulated corporate sector;
1.Takeovers, Mergers & Acquisitions
2.Chapter 13 type Bankruptcy Code
3.Insolvency and Winding Up
4.Recovery of Proceeds of Crime
5.Assurance of Directors, Officers and Key Managers being “fit and proper persons”
6.Duties, Accountability, Retiring Age and Remuneration of Directors, Officers and Key Managers
7.Declaration of Related Party Transactions and Conflicts of Interests
8.Control of Insider Dealings and Other Violations / Manipulations of Capital and Debt Markets Operations
9.Misrepresentations in Prospectus/Accounts/Reports, Defamation and Libel
10.Duties, Accountability and Remunerations of Auditors, Audit Reports and Accountability of Auditors
11.Transparency and Accuracy/Validity of Disclosures, Accounts and Other Stakeholder Disclosures
12.Fair Value and Solvency linked Disclosures and Commitments
13.Public Safety, Consumer Protection and Environmental Protection linked Disclosures and Commitments
14.Good Governance, Ethical Conduct and Corporate Social Responsibility linked Disclosures and Commitments
15.Anti Bribery, Corruption and Policy Corruption linked commitments
16.Control of Corporate /Financial and Cyber Crimes, Money Laundering, Terrorism Financing and Transfer Pricing
17.Share Options, ESOPS and Derivatives
18.Assuring Effective Compliance, Control and Risk Management
19.Promoting and facilitating Small & Medium Size Companies and Not for Profit Operations
20.Mediation and Arbitration in Corporate Dispute Resolution
The Advisory Commission should be made up of persons of high integrity and independence, with required expertise and proven track record of achievements in the relevant fields associated with Company Law Reform and the realisation of the objectives set out herein before. These members must be required to declare and establish that they are ‘fit and proper persons’, ‘with no conflicts of interests’ in the effective performance of their assigned roles.
The Advisory Commission should be required to plan and complete its tasks within a period of 18 months from their appointment, with the publication of an interim white paper to be completed in 12 months from their appointment, allowing further three months for public review, debate and to submit their final recommendations with the publication of a report within 3 months thereafter.
I am sure that the above proposal will receive the due consideration of yourself, your advisory team and the Minister of Finance & Planning.
