The Hon. Chathuranga Abeysinghe - Deputy Minister of Industry and Entrepreneurship Development

¶ 01 Hon. Deputy Speaker, I speak after the Opposition Leader’s speech, which was full of anecdotes. We expected a macro-level speech; instead, it was micro-level nitpicking. When this Government provides a solution to a centuries-old problem, they drag in a trivial issue.

¶ 02 They now pretend to care about public servants. Ask any public officer: since this Government came in, the value and respect afforded to them has increased. Those who once made officers work on mere political commands now lecture about public service. We will protect officers who act lawfully and professionally. We have no desire to protect those who harm the State, are corrupt, or are lethargic. We aim for a strong, rules-based, technologically enabled administration with competent secretaries and directors functioning beyond political interference.

¶ 03 Before beginning, let me note: in the past, despite having Housing Ministers, people whose homes were swept away by floods and landslides were not given safe housing. This Government guarantees that those affected will never again face such calamity in their lifetime. We are building 20,000 houses resilient to disasters.

¶ 04 On today’s Bill: for 76 years, no one modernized the 1853 Insolvency Ordinance. It took a new Government to bring this to Parliament. You bankrupted the country; now a law is also needed to rebuild it.

¶ 05 Thank you for the additional three minutes.

¶ 06 You cannot revive the economy with those unwilling to reform. Investment stayed away because we lacked strong legal frameworks. Under the 2007 Companies Act, the process drove a person into lifelong insolvency and ended a company’s existence. This new Rescue, Rehabilitation and Insolvency (Corporate and Personal) Bill introduces rescue first, then rehabilitation, and finally insolvency where necessary—aligned with international best practice. Credit is due to our Government and the public officials who worked long to craft it.

¶ 07 This Bill is crucial for SMEs. During the COVID-era economic crisis, around 12,000 businesses risked parate action; over 1,000 have already faced it. Had this law existed in 2019, many could have been saved.

¶ 08 Under the new regime, when a person or business collapses, creditors often harass the debtor and keep them down. Now, with State-facilitated breathing space, the debtor and creditors can agree on a plan to restore viability. It gives a second life. An Insolvency Regulatory Authority will be established. Those with genuine difficulties—management issues, market shocks, or health reasons—can approach it for relief and a structured turnaround. Only after presenting a plan do creditors like banks get to proceed with enforcement. This balances banks with other stakeholders such as employees, suppliers, and the State.

¶ 09 After a fair process, the debtor can regain normal economic status—no perpetual CRIB blacklisting after insolvency resolution. The veil of incorporation will be respected; a failing business may be transferred to new owners to continue operations, preserving jobs, production, and supply chains. This is the path we will now follow.

¶ 10 We will also create a cadre of Insolvency Practitioners (IPs) with legal and accounting expertise, and utilize District Courts—potentially moving to dedicated Commercial Courts for speed. The Bill delineates tailored paths for companies and for micro/small businesses, including possible write-downs for loans below Rs. 50 million, and relief for individuals facing hardship.

¶ 11 Parate: currently, banks can enforce security extrajudicially. Under this Bill, there will be a minimum 60-day standstill before parate can be used, extendable on justified grounds to 90 or 180 days—an SME request we can consider further.

¶ 12 This framework will also attract fresh capital to revive fallen enterprises. Properly implemented, no viable industry need collapse due to temporary shocks.

¶ 13 Beyond the Bill, we have scaled up unsecured lending to 1,600 beneficiaries; concessional loans at 5% interest this year total Rs. 25 billion, with Rs. 95 billion across all concessional schemes—the highest in history for SMEs—with Rs. 44 billion disbursed in Q1. Processing times were cut from over four months to two. Next year, we will launch venture capital and a fund-of-funds, with targeted funds for IT and tourism via the World Bank and ADB.

¶ 14 On 13th, we will unveil the National SME Development Framework with 11 pillars—integrating dispersed programmes under the Industry Ministry, focusing on data-driven, export-oriented growth, local market access, finance, know-how, institutional coordination, and entrepreneurship education with the Education Ministry. We will also update the outdated 2016 SME policy by year-end.

¶ 15 Some are spreading falsehoods to pit the public service against the Government as we build a strong economy together. Those attempts will fail. We value and empower our public officers as we move towards our goals. Thank you.