24 January, 2020

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Keep The Public Informed Of Securities Regulations: Jayaratne

Good governance activist Chandra Jayaratne has requested the Securities and Exchange Commission of Sri Lanka (SECSL) to inform all stakeholders of the society concerning Securities Rules and Regulations and the effective enforcement processes applicable when dealing with Mergers and Acquisitions that give rise to the concentration of economic power and market control opportunities.

Chandra Jayaratne

Chandra Jayaratne

Jayarathne who was also the former Chairman of the Ceylon Chamber of Commerce, in a letter to the SECSL on Thursday (17) has pointed out that the concentration of economic and market control power in the hands of a few can result in detrimental impacts on consumer interests and business.

He has also pointed out that due to the inevitable likelihood of such concentration of economic and market control power among a handful that would lead to anticompetitive practices (arising from the need to obtain and maintain control) can negatively impact the growth and prosperity of the country in the longer term .

In his letter therefore, he has suggest the present situation deems it essential that the following steps be adopted in order to ensure effective market operation and growth.

We publish below the letter in full;

Officer-in-Charge / Deputy Director General,

Securities and Exchange Commission of Sri Lanka,

Level 28 and 29, East Tower, World Trade Centre,

Echelon Square,

Colombo 01

Dear Sir,

Securities Regulations to Control Mergers and Acquisitions

I am sure you will no doubt agree, that the concentration of economic and market control power in the hands of a few, is likely to injure the interests of consumers and businesses and negatively impact on the growth and prosperity of the nation and its people in the longer term, due to the inherent likelihood of such concentration leading to anticompetitive practices in an effort to obtain and maintain control. Such fears have resulted in appropriate Securities Regulations being enacted and enforced with effectiveness, to combat the likely anticompetitive practices, diminished free market opportunities and limits placed thereby on individual initiative.

It could therefore be deemed essential for effective market operation and growth and prosperity of nations and people that “Concentration” arising from

  • The mergers of two or more previously independent undertakings;
  • The acquisition of direct or indirect control ( whether by purchase of securities or assets, by contract or otherwise) of the whole or parts of one or more other undertakings; or
  • The establishment of a joint venture involving the acquisition of joint control of a full function joint venture undertaking

where “Control( both ‘sole control’ or ‘joint control’ in cohort with other undertakings, where the control arises from the joint initiatives of the separate undertakings in exercising decisive control) is exercised by rights, contracts or any other means, which either separately or in combination, confer the possibility of exercising decisive influence over an undertaking by a party acquiring the ability to determine an undertaking’s commercial strategy, irrespective of whether such acquisition allows majority or minority control by way of shareholding, but provides by way of the size of such shareholding, associated veto rights, rights of control over board appointments, other rights granted to shareholders explicitly or otherwise,  empowering such a party to get adopted or block strategic commercial decisions including approval of annual budgets or business plans and appointments of key management are regulated and effectively controlled by a duly empowered  regulator.

I would, in recognition of the foregoing submission, be most grateful if you will kindly arrange, by way of a public media announcement, to inform all stakeholders of society, of the Securities Rules and Regulations applicable and the effective enforcement processes in place within the Securities and Exchange Commission, in dealing with Mergers and Acquisitions that give rise to the concentration of economic power and market control opportunities.

If no such regulations and enforcement processes are in place at present, kindly explain

  • The rationale for such a lacunae to be allowed to remain within the regulatory regime, and
  • What strategic steps are being planned by the Government and the relevant authorities in order to remedy such an unacceptable situation.

I look forward to early response action by you and your colleagues in the Securities Exchange Commission.

Yours Sincerely,

Chandra Jayaratne

cc. Secretary to H.E. the President,

Secretary to the Treasury,

Secretary Ministry of Economic Development,

Secretary Ministry of Cooperatives and Internal Trade,

Secretary Ministry of Industry & Commerce,

Governor of the Central Bank,

Chairman, Securities Exchange Commission,

Secretary General, Ceylon Chamber of Commerce,

Chief Executive Officers of the Institute of Chartered Accountants/CIMA/ CFA/ Institute of

Directors/OPA/Economic Association/Transparency International

Editors of Financial Sections of Media Institutions

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Latest comments

  • 1
    1

    Chandra Jayaratne

    Keep The Public Informed Of Securities Regulations: Jayaratne

    “Good governance activist Chandra Jayaratne has requested the Securities and Exchange Commission of Sri Lanka (SECSL) to inform all stakeholders of the society concerning Securities Rules and Regulations and the effective enforcement processes applicable when dealing with Mergers and Acquisitions that give rise to the concentration of economic power and market control opportunities.”

    Why restrict to Securities only.

    What about Law and Order?
    What about Para-Sinhala “Buddhist: Terrorist assisted by the sate a>

    Why not inform the Public on that.

    • 1
      0

      “Good governance activist Chandra Jayaratne”.

      Isn’t this the same Chandra of Friday Forum who chose to protect the rear of Dr.Dhanapala when the conflict of interest issues arose in relation to the latter being part of two organisations one of which was blocking CT while the other was preaching GG, freedom of the press etc etc?

      Isn’t this the same Chandra who served as the Director of Ceylon Tobacco Company PLC an organisation which according to Ministry of Health contributes to 20,000 deaths a year. Even after leaving that entity Chandra continues to promote CTC related sponsorship knowing well the dastardly contribution of this industry to global health and Sri Lanka’s attempt to curb it via tougher laws. Add to that the organisation for which he was the former Chairman of, the Ceylon Chamber of Commerce, recognised CTC as one of the 10 Best Corporate Citizens in Sri Lanka and to top it off the award was given for “Environmental Value Addition”!. (Source: CTC Annual Report: https://www.cse.lk/cmt/upload_report_file/460_1394531695844.pdf). Please google and read how academics and media outlets lampooned the awards being given to such an organisation.

      It is the same CTC which approached Gota just a few months ago, as reported here and on other media outlets, for assistance with a legal challenge against the GoSL’s attempt to introduce graphic packages to inform the people of the effects of smoking and thereby curb smoking related ailments/risk factors. (source: https://www.colombotelegraph.com/index.php/de-facto-cj-pieris-deciding-counsel-gota-to-arrange-meetings/ + for more Google)

      Here is an extract:
      “A group of representatives from the tobacco company has recently met with the Defence Secretary with the aim of getting a Supreme Court order against the Court of Appeal decision and to get an order against the Health Ministry decision to publish photographic images depicting the harm caused by smoking.” source: http://goo.gl/I7cRwJ

      Just point me to single communication condemning the insidious games being played by corporates he or his associates are/was part of and the politicians linked to those corporates in relation to the above matters.

      GG is the new buzz word. Every NGO and every ‘wannabe’ activist love to add this word in front of their role. It is the modern version of the knighthood!. We saw how CPA’s GG turned out to be when challenged on matters relating to Sanjana.

      Given truth is a process I hope people will embark on a process to ensure that those who preach GG etc first start practicing it at home. And when challenged stick to GG and be transparent about their own failures. Otherwise the actions of both the accusers and accused just become a case of ‘kettle calling the pot black’.

  • 3
    1

    Chandra Jayaratne

    beruwela mosque attack ladies comments 1

    https://www.youtube.com/watch?v=_ywZdxTXLmY

    Aluthgama attack

    https://www.youtube.com/watch?v=vTbhlVxs5xc

    Keep The Public Informed Of Securities Regulations: Jayaratne?

    Is this Para-Sinhala Buddhism? What is the President doing? Lying?

    Why restrict to Securities only. What about Law and Order? What about Para-Sinhala “Buddhist: Terrorist assisted by the sate a> Why not inform the Public on that.

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