News
Fitch downgrades Sri Lanka

Fitch Ratings on Wednesday downgraded Sri Lanka’s Long-Term Local-Currency (LTLC) Issuer Default Rating (IDR) to ‘C’ from ‘CC’.It said the issue ratings on local-currency bonds had also been downgraded to ‘C’ from ‘CC’.
Fitch also affirmed the Long-Term Foreign-Currency (LTFC) IDR at ‘RD’ (Restricted Default) and the Country Ceiling at ‘B-‘.Fitch said that the downgrade of Sri Lanka’s LTLC IDR reflects its view that a sovereign local-currency debt
restructuring process has begun, as parliament approved the government’s domestic debt restructuring plan on July 1.The press release said that in Fitch’s view, the proposed domestic debt optimization (DDO) strategy will qualify as a distressed debt exchange (DDE) under its criteria, as it entails a material reduction in terms and is needed to avoid a traditional payment default.
“We will downgrade the LTLC IDR to ‘RD’ upon closing of the exchange offer and following confirmation that the exchange will be executed. The government plans to complete the exchange within July,” Fitch said.
Below are excerpts of the press release: “DDO Qualifies as DDE: In Fitch’s view, the proposed DDO will qualify as a distressed debt exchange (DDE) under our criteria, as it entails a material reduction in terms and is needed to avoid a traditional payment default. We will downgrade the LTLC IDR to ‘RD’ upon closing of the exchange offer and following confirmation that the exchange will be executed. The government plans to complete the exchange within July.
“Foreign Currency IDR in Default: The sovereign remains in default on foreign-currency obligations and has initiated a debt restructuring arrangement with official and private external creditors. The Ministry of Finance had issued a statement on 12 April 2022 that it had suspended normal debt servicing of several categories of external debt, including bonds issued in international capital markets, foreign currency-denominated loan agreements and credit facilities with commercial banks and institutional lenders.
“ESG – Governance: Sri Lanka has an ESG Relevance Score of ‘5’ for Political Stability and Rights as well as for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. These scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in our proprietary Sovereign Rating Model (SRM). Sri Lanka has a medium WBGI ranking in the 45th percentile, reflecting a recent record of peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, established rule of law and a moderate level of corruption.
ESG – Creditor Rights: Sri Lanka has an ESG Relevance Score of ‘5’ for Creditor Rights, as willingness to service and repay debt is highly relevant to the rating and is a key rating driver with a high weight. The affirmation of Sri Lanka’s LTFC IDR at ‘RD’ reflects a default event.”
News
LG Commissioners in dilemma over guidelines and Elections Act

Executive Director of the Institute for Democratic Reforms and Electoral Studies (IRES) Manjula Gajanayake has said the Local Government Commissioners have created confusion and a severe erosion of public trust in the electoral process at local level by adhering to election laws and administrative guidelines selectively without adopting a consistent approach.
The authority to establish local government bodies— particularly the hung ones––has been granted to the Local Government Commissioners in the nine provinces. However, this process has now sparked controversy largely due to ambiguity over how to elect council heads.
At the heart of the issue is the Local Government Elections Act, which does not specify the procedures to be followed in electing the heads of local bodies. To address this issue, the Secretary to the Ministry of Local Government and Provincial Councils has issued a 28-page set of guidelines. This guideline gained much attention during the election of the Mayor of the Colombo Municipal Council, where opposition members claimed that the head of the council had to be elected according to the guidelines in question. However, the guidelines merely state, “Each member should be consulted, and the method of voting should be decided accordingly.”
The Opposition seemed to have ignored that there were three acceptable methods of voting––by a show of hands, through a secret ballot, or by using an electronic system, Gajanayake said. Still, the real issue lies in the application of the guidelines by the Local Government Commissioners.
For instance, the Western Province Commissioner opted for a secret ballot in the Colombo MC. In contrast, in many other councils, the voting method was determined based on the preference of the majority of members. In Local Government Institutions in Uva, North Central, and North Western provinces, where members called for open votes by the show of hands— the commissioners complied.
However, inconsistency re-emerged in the first meeting of the Seethawakapura Urban Council of the Colombo District in the Western Province. Out of 25 members,14 requested an open vote. The Commissioner, however, insisted on a secret ballot. As a result, all 14 members walked out in protest, and the meeting was adjourned without electing a head.
By PRIYAN DE SILVA ✍️
News
Hotel shooting: Weligama police probe riddled with flaws, CID tells committee

CID Director of Investigations Ashoka Shelton Karunathilaka told the Parliamentary Inquiry Committee probing the interdicted IGP Deshabandu Tennakoon that numerous flaws had been found in the investigations carried out by the Weligama Police into a shooting incident at the W15 Hotel.
Giving evidence before the special inquiry committee, chaired by Supreme Court Justice Preethi Padman Surasena, Karunathilaka said that the Weligama Police had proceeded with their investigation riddled with flaws. “Even the locations of spent bullet casings at the crime scene were not properly marked. There was a mismatch between the empty bullet casings and the recovered ammunition. Additionally, CCTV footage from the crime scene area shows inconsistencies.These investigative shortcomings were the reason why legal action was taken against the OIC of the Weligama Police Criminal Investigation Division. Moreover, no proper investigation was carried out into the police officer who was fatally shot.”.
The committee met for the eighth day on Wednesday, when seven witnesses testified. The final witness of the day was Karunathilaka, who pointed out the deficiencies in the initial investigations by the Weligama Police.
At this point, counsel S. Weerawikrama, representing Deshabandu Tennakoon, questioned whether the warrant for Tennakoon’s arrest had been obtained under political or ministerial pressure.
Karunathilaka answered in the negative.
During the session, counsel Weerawikrama raised his voice while cross-examining the witness, prompting one of the committee’s judges to advise him to ask questions without getting agitated.The day’s proceedings concluded with the committee recording the testimonies presented by the prosecution, led by Deputy Solicitor General Dileepa Peiris.
By Kamal Bogoda
News
Harshana resigns from Parliament

Secretary General of Parliament Kushani Rohanadeera has informed the Chairman of the Election Commission in writing that a vacancy has arisen in Parliament due to the resignation of Dr. Harshana Suriyapperuma.
Dr. Suriyapperuma, a National List Member of Parliament representing the NPP and the Deputy Minister of Finance and Economic Stabilization, submitted his letter of resignation to the Secretary General of Parliament, Kushani Rohanadeera.
According to the letter submitted by Dr Suriyapperuma, the resignation is effective from June 20, 2025.
Accordingly, the Secretary General has informed the Chairman of the Election Commission that, in terms of Section 64(5) of the Parliamentary Elections Act No. 1 of 1981, the seat held by Dr Harsha Suriyapperuma in the Tenth Parliament is now vacant.
Speculation was rife at the time of going to press that Dr. Suriyapperuma would be appointed Secretary to the Finance Ministry.
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