Most non-compliance issues with SLAS linked to related party transactions

All over the world related party transactions and minor shareholders’ rights have become a key discussion point and an important policy issue. This has drawn the attention of the SEC too.

Some of the actions SEC has taken in this regard such as amendments to the CSE Listing Rules requiring greater corporate disclosure on related party transactions have in fact helped us to improve our Doing Business rankings.

As a result of these amendments Sri Lanka’s ranking has improved from 74 to 46 in the area of protecting investors which you would agree as a drastic improvement. According to the observations of our financial reporting surveillance team most of the non-compliance issues with Sri Lanka Accounting Standards for the last two to three years have been linked to related party transactions.

This is another reason that has prompted SEC to issue a consultation paper on related party transactions which has proposed certain measures to address the concerns. We hope to discuss these things in greater details at today’s seminar.

Do not consider this consultation paper as a finality. We are quite flexible and open to discussion so that collectively we can find the best way to move forward.

Therefore, I believe this forum would be an opportunity for everyone present here to express your views and facilitate our efforts in improving regulatory measures in order to maintain the integrity of the capital market.