The Hon. Chandima Hettiaratchi

¶ 01 Hon. Presiding Member, as we take up for debate this important Bill on Rescue, Rehabilitation and Insolvency (Corporate and Personal) which impacts the economy and is needed to revive it, I wish to raise a few key points.

¶ 02 What is insolvency? Simply, it is bankruptcy. It can befall an individual when liabilities exceed assets; it can befall a company; and it can befall a state—as it did to Sri Lanka in 2022. Those in the Opposition—the “presidents of pressure,” the so-called “therapy therapy presidents”—got together, plundered the country and bankrupted it, pushing us to where we could not service debt and interest. It can also happen in the private sector and to individuals.

¶ 03 What is this Bill in 2026? Our foundational statute in this area dates back to 1853—the Insolvency Ordinance, No. 7 of 1853—a colonial law. With the Colebrooke-Cameron reforms of 1833 and the rise of capitalism here, that law suited those times. But as the domestic capitalist economy developed and integrated into the global economy, new legal frameworks were needed. Though this was discussed, it was not implemented, leaving us with problems such as a low rank in the Ease of Doing Business Index. To climb higher, we need to improve the ease of doing business.

¶ 04 Accordingly, Hon. Presiding Member, after long deliberations among academics, policymakers, Parliament and committees, drawing from international experience, we have brought this Bill. I wish to highlight areas where the new law focuses more than the old. It is not only about winding up fast after bankruptcy. If there is viability in a bankrupt business, we must provide the support needed to rebuild it. International best practices exist, and this new legal framework is aligned with them. For that purpose, the Insolvency Regulatory Authority is being established to carry out the necessary tasks.

¶ 05 When you say “bankrupt” many think it is over and there is no return. They said the same about our country. But our Government, with the President taking responsibility as Finance Minister, has put the country back on track. Likewise, those who become personally or corporately bankrupt must be able to rebuild with hope. That hope and the supportive background were absent before. This Bill creates that foundation.

¶ 06 A key focus is MSMEs—micro, small and medium enterprises. According to 2024 data, around 1.1 million MSMEs operate in Sri Lanka, contributing roughly 52 per cent to GDP and about 45 per cent to national employment. This sector faces difficulties in access to finance, debt servicing and cash flow constraints. It is also where most business failures occur. This Bill pays special attention to their continuity and rehabilitation. Instead of a purely one-sided parate enforcement approach, after due process and dialogue, it creates opportunities for recovery, thereby lifting the country’s business environment and the ease of doing business.

¶ 07 Hon. Presiding Member, let me quote from the Central Bank of Sri Lanka’s Annual Economic Review – 2025, page 32:

¶ 08 “A broad-based expansion in credit across key sectors of the economy was observed in 2025, reflecting the ongoing recovery in economic activity.”

¶ 09 In 2025, credit to the agriculture sector increased by Rs. 163.3 billion (9 per cent), industry by Rs. 583.4 billion (37.8 per cent), services by Rs. 849.6 billion (31.2 per cent), and personal loans by Rs. 4006.3 billion (22 per cent). Such broad-based credit expansion occurs when the Government builds confidence among people and businesses. In such a context, a law like this is very important to strengthen businesses that seek to expand and to help those at risk avoid collapse.

¶ 10 Hon. Presiding Member, as a Government, we are acting to make our economy resilient so it cannot be easily broken again. Yet, the “therapy therapy President 1.0 and 2.0” types try to mislead the public with falsehoods and mudslinging—even hurling mud at the Digital State Minister and then saying “sorry” on TV. They are only scheming to seize power by conspiracy. We say: sorry, that won’t work. This is a substantial Bill with many pages and is very beneficial to the bankrupt Opposition. I urge the bankrupt Opposition to read the Bill and learn how to rehabilitate themselves by the next round.

¶ 11 Thank you.