The Hon. (Mrs.) Chamindranee Kiriella, Attorney-at-Law

¶ 01 Madam Presiding Member, I am pleased to speak at the Second Reading of the Bill on Rescues, Rehabilitation and Insolvency (Institutional and Individual). This important Bill repeals the very old Insolvency Ordinance (No. 7 of 1853), and amends the Companies Act, the Inland Revenue Act, and the Mediation Boards Act.

¶ 02 Its passage will help resolve economic difficulties faced by our people and institutions. It provides legal relief and reorganization options when a person or entity is unable to repay a loan. The initiative to bring this Bill began under the previous President; I am happy the present Government has advanced it to Second Reading today.

¶ 03 Previously, our bankruptcy law disproportionately affected MSMEs. MSMEs account for about 75% of businesses and about 45% of employment in Sri Lanka, yet they were heavily burdened by the old regime. The Bill before us will be a great support to these enterprises.

¶ 04 Due to the 2022 economic crisis, roughly 20% of MSMEs reportedly closed. Today they face high taxes, fuel and electricity price hikes, and other pressures. Further, the last Budget reduced the annual turnover threshold, bringing many more MSMEs into the tax net, heightening closure risk.

¶ 05 This comprehensive Bill is around 600+ pages. However well-crafted, it will only meet its objectives if implemented effectively. The proposed Insolvency Regulatory Authority must be established and made operational without delay. We have precedents of enacted bodies not being set up—the Budget Office, the Gambling Regulatory Authority, and the National Commission on Women (with the women’s commission currently inactive). Passing laws without establishing the institutions defeats their purpose. Urgent steps are needed, and appointments—especially of the Director-General and Members—must be based on merit and relevant experience, not political patronage.

¶ 06 We recently saw a fraud of about USD 2.5 million of public funds. It appears the Secretary to the Treasury lacked the necessary experience for the post, having served only 14 months as an MP before appointment—arguably the first overtly political appointment to that office. Perhaps that is why no action has been taken to remove him. There are also questions regarding his citizenship status, with Supreme Court precedent (from Hon. Geetha Kumarasinghe’s case) requiring the person concerned to disclose relevant details. Yet the Government has offered no clarification. Because of such appointments, public funds were lost overnight, and innocent officers face pressure.

¶ 07 A state officer allegedly linked to the fraud tragically lost his life. Even if the money is recovered, that life cannot be restored—children lost a father, a wife lost her husband. Therefore, I earnestly urge the Government to make appointments properly.

¶ 08 Thank you, Madam Presiding Member.