Encouraging SOE public listings
View(s):Of the 55 State Owned Enterprises (SOE) monitored by the Ministry of Finance, some Rs. 150 billion loss was recorded last year, officials said.
This amount equals to 80 per cent of government’s health expenditure of that year, Dr. Roshan Perera, Independent Consultant and former Director, Central Bank, a panellist at the Ceylon Chamber of Commerce organised Sri Lanka Economic Summit session on ‘Empowering Take-Off – Efficient Government and Progressive State Enterprises’, said.
She also said the 55 SOE contribute 14 per cent to the GDP. This session which focused on the role that the government and its institutions/enterprises will play in driving the economic recovery, looked at how the public sector would re-orient itself to fulfil the policy objectives and the needs of the public.
Dumith Fernando, Chairman Colombo Stock Exchange (CSE) noted that history has taught that maintaining SOE within government control isn’t ‘entirely feasible’. He noted that listing them on the CSE will give the SOE accountability and transparency in the eyes of the public whereas to the government managing them, it will give them the value of capital and an opportunity to tap into other funds.
The CSE approved a new set of rules to facilitate state enterprises to list debentures by giving them more leeway than other corporates on certain aspects such as slightly relaxing criteria on their financial reporting statements etc. Dr. Malathy Knight, Research Associate, Verité Research (Pvt) Ltd, explained that there’s a principal-agent problem with conflicting priorities in SOE, adding: “There’s a lack of transparency and management issues arising from that.”
She highlighted the need for a robust institutional structure for SOE which will prevent them from collapsing like that of the Druk Holdings & Investments), which is Bhutan’s state investment holding company. She suggested a stricter unit such as China’s state-owned Assets Supervision and Administration Commission of the State Council (SASAC) which is a special commission directly under the State Council.
Treasury Secretary Sajith Attygalle said a company will be formed to hold Grand Hyatt, Grand Oriental Hotel, Hotel Developers, and land belonging to the Cey-Nor Foundation and be listed in the market before the first half-end of 2021. (DEC)