The Hon. Bhagya Sri Herath, Attorney-at-Law

¶ 01 Madam Presiding Member, today we debate amendments to the Companies Act, No. 07 of 2007. The core is to implement FATF Recommendation 24—beneficial ownership—so that the true owners of shares in a company are known to the public and to law enforcement. This Recommendation has not been implemented in our country though many others have. While most FATF Recommendations are implemented, non-implementation of Recommendation 24 remains an issue.

¶ 02 The Opposition Leader indicated broad agreement. Some Members raised objections or concerns.

¶ 03 We must understand how vital these amendments are for our country. For some time, Sri Lanka became a hub for corruption. Research by institutions like Verité Research and others showed this. The world harbored serious doubts about our rulers, officials and legal framework, sensing that smugglers had space in this country. For a time, the country was captured by such elements. Now, with a change in state power and the NPP in government, it is easier to introduce these amendments.

¶ 04 No one in the present administration will be harmed by this. Ultimately, any company must disclose who truly owns shares, whether inside or outside the company. Some argued it is complex. This is a globally accepted standard to prevent terrorism and money laundering—issues that affect the entire world.

¶ 05 If we look at money laundering historically, it is often linked to terrorism, narcotics trafficking or other activities that harm society at large. The world wants to prevent this. But some in the Opposition speak as if this does not concern us. These amendments will prevent laundering and financing of terrorism: converting unlawfully gained wealth into apparently clean funds and reinjecting them—this will be stopped.

¶ 06 The process is simple: companies must disclose persons holding shares and provide relevant data on acquisitions. Clear data exist and can be furnished.

¶ 07 A petition has been filed in the Supreme Court alleging that this should apply not only to local but also to foreign companies. After discussion and consensus, we have arrived at these amendments. Any company—66% or more—could have gone to Court if rights were infringed. No such findings have emerged, and there is no demonstrated adverse impact on foreign investors. Rather, as a country we show stability and that those with clean capital can invest here under clear laws.

¶ 08 A further message is that failure to bring this for so long suggests that some with power were complicit with laundering and terrorist finance. With this amendment we are saying there will be no space for such transactions. This will benefit the economy and our national reputation.

¶ 09 Today is also an important day. With little time left, I will briefly note: today is 23 July.