Business
SOE reforms seen as bedevilled by corruption and governance issues
By Lynn Ockersz
The local State Owned Enterprises (SOE) reforms process is dogged by widespread corruption and governance issues. There was general agreement on this position at a wide-ranging discussion held under the aegis of the Sri Lanka Innovators’ Forum of the Dr. Gamani Corea Foundation on October 16 at the BMICH.
The prime focus of the discussion was a paper presented by the Advocata Institute, Colombo, on ‘Public Enterprise Reforms’. Key presenters for the Institute were its senior personnel Dhananath Fernando and Ms. Rehana Thowfeek. Director General, State-Owned Enterprises Restructuring Unit of the government, Suresh Shah, chaired the discussion and moderated it.
The principal panelists at the forum and some key comments made by them are as follows:
Dhananath Fernando: ‘Markets must be allowed to function. The government has no business in business enterprises. Doing SOE reforms fast and transparently is important. Profitability should not be the only consideration in this process. It is equally important to return to the country’s ownership these assets in the form of SOEs. The owners of an SOE are the citizens of the state. However, the worrisome matter is that citizens do not have a say in how an SOE is run; neither can they exit the reforms process if the SOE’s performance is unsatisfactory.’
Rehana Thowfeek: ‘A Rs. 1.8 trillion debt is owned by SOEs. However, reforming SOEs is vital for development. Corruption too is a recurring issue in SOEs. Sri Lanka’s health sector is a case in point. Privatization, though, should be seen as a priority.’
Suresh Shah: ‘The SOE restructuring process is geared to serve the wellbeing of the public and is not directed by the IMF. Listing of SOEs is vital but governance issues are getting in the way of development. The government should invest in the public sector but a prime issue is whether money is going to the right place.’
Dr. Lloyd Fernando, chairman, Dr. Gamani Corea Foundation: ‘There is a need to look at our problems holistically. The Temasek model is vital in this connection.’
Mahendra Jayasekera, Managing Director, Lanka Wall Tiles & Lanka Tiles: ‘There is this recurring problem of politicians trying to have a say in privatized enterprises. Besides, they are notorious for their double-talk. For example, they say one thing in parliament on SOE reforms and another thing to their electorates. They do not understanding the concept of return on assets. We have a serious governance problem in the country. We need to find out what benefits would accrue to the country from SOE reforms. Besides, people are skeptical about reforms being of any use.’
Chandrasena Maliyadda, Former Secretary, Ministry of Plan Implementation, Ministry of Southern Regional Development and Ministry of Posts and Telecommunications: ‘Privatization must be carried out after studying every SOE. Each SOE is different. We do not know whether the bidders for SOEs have the capability to run them, once they take them over. The Kantale Sugar Factory is a case in point. The irony is that these bidders seek government assistance to run these SOEs once they are privatized. However, the private sector, although seen as an ‘engine of growth’ is not at all effective.
‘The main issue is that our economy has been eroding. We don’t produce, there are no vibrant entrepreneurs. There is no risk-taking. What happens in privatization is that SOEs go from one set of corrupt hands to another. We should look carefully at how we are going to privatize. Privatization, though, is no panacea. All sectors are corrupt. We need to tread carefully.’
R.H.W.A. Kumarasiri, Director General, National Planning Department: ‘Do we have a system to put the right man in the right place? Are we implementing plans effectively? Good governance is important in every sector. Are all our sectors heading in one direction or are we at cross-purposes? All relevant stakeholders in development need to communicate effectively with the public on these issues. Different models are needed for different SOEs.’
The Central Bank of Sri Lanka (CBSL) launched the Sustainable Finance Roadmap 2.0 on 05 May 2025 at the Atrium of CBSL, marking a key milestone in its continued efforts to foster a climate-resilient and socially inclusive financial system.
Recognising the growing implications of climate-related risks on price stability and financial system stability, CBSL introduced the first Sustainable Finance Roadmap in 2019, which provided foundational guidance to financial institutions on managing environmental, social, and governance (ESG) risks while encouraging financing for green and inclusive economic activities.
In light of evolving global developments, increasing access to climate-focused financing, and broader recognition of the social dimension of sustainability, CBSL developed the Sustainable Finance Roadmap 2.0 for the period 2025–2029, with technical and financial support from the International Finance Corporation (IFC) in partnership with the European Union, under the Accelerating Climate-Smart and Inclusive Infrastructure in South Asia (EU-ACSIIS) programme.
The Roadmap 2.0 was crafted in close collaboration with key stakeholders, including Securities and Exchange Commission of Sri Lanka (SEC), the Insurance Regulatory Commission of Sri Lanka (IRCSL), the Colombo Stock Exchange (CSE), the Sri Lanka Banks’ Association (SLBA), The Finance Houses Association of Sri Lanka (FHA), financial institutions and government bodies.
Focusing on Sri Lanka’s financial sector, the Roadmap 2.0 outlines a comprehensive set of prioritised actions for banking, non-banking, capital market, and insurance sectors. These actions are geared toward financing sustainable development, strengthening the management of environmental and social risks, enhancing reporting and disclosures, and improving governance and coordination across institutions.
The launch event was attended by distinguished guests including Gevorg Sargsyan, Country Manager for World Bank and IFC in Sri Lanka; officials of IFC and EU; Ministerial secretaries and senior officials of government institutions; national and international experts on sustainability; representatives of financial institutions and partner agencies.
Communications Department 05.05.2025 2 Delivering the keynote address, Dr. P. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka, emphasised that the launch of Sustainable Finance Roadmap 2.0 marks a vital step in strengthening the resilience and inclusiveness of Sri Lanka’s financial sector amid growing climate and social challenges. He highlighted the need for urgent, coordinated action to integrate climate risk into financial decision-making and called for strong stakeholder collaboration to ensure effective implementation of the Roadmap 2.0.
Speaking at the event, Gevorg Sargsyan, Country Manager for World Bank and IFC in Sri Lanka, noted that as Sri Lanka strives for resilient and inclusive growth, sustainable finance will be crucial in creating jobs and driving economic expansion, while also positioning the country to be investment ready. He further highlighted that building a truly sustainable financial ecosystem in Sri Lanka is a collective endeavor – one that IFC has been a part of from inception, and remains committed in working together with the Central Bank of Sri Lanka and industry stakeholders to bring the shared vision of the Sustainable Finance Roadmap 2.0 to fruition.
The keynote was followed by a session providing an overview of the Sustainable Finance Roadmap 2.0, led by Ms. W. A. Dilrukshini, Assistant Governor of CBSL, and Ms. Wei Yuan, ESG Officer of IFC. A panel discussion on “Rolling Out the Sustainable Finance Roadmap 2.0” featured Dr. Thusitha Sugathapala, National Technical Expert on Sustainability; Ms. S. Ketawala, Additional Director of the Bank Supervision Department of CBSL; Thimal Perera, Chief Executive Officer of DFCC Bank; and Ms. Nilupa Perera, Chief Regulatory Officer -Designate of CSE.
The Sustainable Finance Roadmap 2.0 can be accessed using the following link:
https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/sustainable_finance_roadmap_2.0.pdf
Browns Investments PLC (BIL), the investment arm of the LOLC Group, has announced a significant expansion of its plantation portfolio with the acquisition of FLMC Plantations (Pvt) Ltd (FLMC). The acquisition was completed on May 5, 2025, through a Share Sale and Purchase Agreement with Damro Manufacturing (Pvt) Ltd and Piyestra Furniture (Pvt) Ltd, for a total consideration of LKR 4.8 billion.
FLMC Plantations serves as the holding company and managing agent for Pussellawa Plantations Ltd (PPL) and Melfort Green Teas (Pvt) Ltd. PPL operates over 11,500 hectares of land across 24 estates, managing 5,400 hectares of tea, 5,900 hectares of rubber, and 200 hectares of minor crops. The estates collectively produce 4.3 million kilograms of made tea and 2.3 million kilograms of rubber annually. Strategically located in Sri Lanka’s renowned tea-growing regions, including Pussellawa, Udupussellawa, Nuwara Eliya, Kandy, Ruhuna, and Sabaragamuwa, these estates will further enhance BIL’s presence in the country’s agricultural landscape.
Commenting on the acquisition, the Group Managing Director/ CEO of LOLC Holdings PLC, Kapila Jayawardena stated, “Over the past two decades, LOLC Group has been guided by a bold vision of expansion and diversification, positioning ourselves as a global powerhouse across multiple sectors. Our acquisition of FLMC Plantations through Browns Investments PLC is another key milestone in strengthening our leadership in agriculture and plantations. With the addition of Pussellawa Plantations and Melfort Green Teas, we are not only expanding our footprint in Sri Lanka’s premier tea-growing regions but also enhancing our ability to supply premium-quality tea to global markets.’’
Business
VFS Global acquires majority stake in CiX Citizen Experience to create a centre of excellence
Supercharged Growth: VFS Global’s partnership will accelerate CiX’s expansion across Brazil, Latin America, and beyond.
Global Powerhouse: With VFS Global’s capital, technology, talent and scale, CiX Citizen Experience will bring new products and technology to the global marketplace.
Quality of Life Commitment: Both companies are dedicated to innovative solutions, including the use of AI, that improve citizens’ quality of life
Local Impact with Wider Reach: Collaboration to modernise services for citizens of Brazil by creating a centre of excellence that stands as a global example.
VFS Global, the global leader in trusted technology services, empowering secure global mobility for governments and citizens, has completed the acquisition of a majority stake in CiX Citizen Experience, a leading provider of digital and physical citizen services based in Brazil. This strategic acquisition marks a pivotal step in VFS Global’s expansion journey—particularly across Latin America (LATAM)—as it continues to broaden its capabilities and deepen its impact in the public service delivery space.
With nearly two decades of pioneering innovation in citizen services, CiX has established a strong presence in Brazil. This success will be further scaled across LATAM and other global markets, leveraging VFS Global’s international reach and operational excellence.
This acquisition is centred on driving transformation through advanced digital technologies, including AI and data-driven platforms. By uniting CiX’s cutting-edge digital capabilities with VFS Global’s extensive global infrastructure and expertise in managing complex service ecosystems, we are positioned to deliver next-generation, integrated solutions to public and private sector clients around the world.
For both companies’ client governments and partners, this will lead to enhanced, tailored solutions that improve citizen engagement, access, and satisfaction.
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