Sending an emphatic message that it means business, the Government yesterday submitted to the Supreme Court for its clearance an urgent Bill aimed at taking over State enterprise and assets which are underperforming or beset with other ills.
The move follows Cabinet approving the proposed Revival of Underperforming Enterprises and Under-Utilised Assets Act. It was submitted to the Supreme Court as an urgent bill for it to rule whether or not it contravenes the Constitution before presenting it to the Parliament. The Supreme Court is expected to give its order to the Speaker and President today.
For takeover, the act stipulates several criterions and the entity or asset should qualify for one of those. One is that the State should own controlling interest in underperforming enterprises; secondly, it faces heavy contingent liabilities (debt) that haven’t been serviced; thirdly, the enterprise or asset is encumbered with protracted litigation; and the final reason is taking over in the national interest of the economy.
Analysts said its submission to SC as an urgent bill means that the Government is keen to effectively deal with underperforming enterprises/troubled assets, which remain a major burden to the Treasury as well as the public.
The move is also in line with the Government’s stated policy of turning around State enterprises for the better to achieve socioeconomic objectives as well as efficiently serve its stakeholders.
Some viewed the proposed act as a further expansion of the State’s involvement in overall business. In recent years the Government, either via Treasury or State entities, had acquired holdings of Emirates in SriLankan Airlines and Shell in the biggest LPG utility.
However, other analysts viewed the act as a forerunner to restructure underperforming enterprises/troubled assets to derive better value, thereby minimising unnecessary burden on State coffers.