Sri Lanka requests Japan to co-chair Sri Lanka debt talks

Sri Lanka has requested Japan to co-chair Sri Lanka’s debt restructuring discussions, President Ranil Wickremesinghe told parliament, while discussions will also be initiated with China.

An earlier version of this story had said, quoting the president, that Japan had agreed to be co-chair of the forurm of creditor nations, but a statement from the president’s office has corrected his speech saying that Sri Lanka had requested Japan to be co-chair.

Sri Lanka has already started preliminary discussions with China.

“After the communist party conference we will start talks with China,” he said.

It is not clear whether China will agree to be the co-chair.

In the case of Zambia, France and China were co-chairs.

Sri Lanka has to first get an agreement with official creditors to get International Monetary Fund approval for an economic reform and bailout plan that is now a staff level agreement.

Sri Lanka has already started discussions with India.

India has given favourable response, President Wickremesighe said.

“We want to get Japan, china and other creditors to agree as soon as possible,” Wickremesinghe said.

“After official creditors we will talk with London Club.”

The London Club is a group of bond holders.

President to visit India for key talks with Modi

President Ranil Wickremesinghe is to visit India to have key discussions with Indian Prime Minister Narendra Modi.

The President told Parliament today that he informed Modi of his intention to visit New Delhi for talks.

Wickremesinghe said that he had brief discussions with Modi in Japan recently.

The President said that he had told Modi that he hopes to visit New Delhi for further discussions.

Wickremesinghe did not say when he hopes to undertake his first visit to New Delhi as President.

President Ranil Wickremesinghe said that Sri Lanka has always had the support of the Modi Government.

He said that India has shown interest in helping Sri Lanka recover from the economic crisis.

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22 A: Amendments accepted at ‘committee stage’ should be subjected to SC approval

Sri Lanka’s former Ambassador to Myanmar, Prof. Nalin de Silva, has said that whatever amendments introduced to a particular Bill at the committee stage should be definitely subjected to the approval by the Supreme Court.

The one-time Mathematics Don has stressed that the Speaker shouldn’t endorse the amended Bill until the Parliament obtained the Supreme Court’s consent.

Prof. De Silva said so commenting on a simmering controversy over Justice Minister Dr. Wijeyadasa Rajapakse, PC, manipulating the committee stage process to introduce new amendments which may not be in line with the Supreme Court ruling on the original Bill on the 22nd Amendment to the Constitution.

Prof. de Silva dealt with the issue at hand as sections of the ruling SLPP, including dissidents, warned against any moves to dilute executive powers to enable the full operationalisation of the 13th Amendment to the Constitution.

The outspoken retired academic has urged the Parliament to introduce an amendment to prevent the Speaker from endorsing an amended Bill, till the Supreme Court approves it.

Prof de Silva last served as Sri Lanka’s top envoy in Myanmar, from 2020 to 2021.

The activist described the absence of provision for the Supreme Court to examine a Bill, following the committee stage, as a major flaw in the Constitution. This loophole should be closed, Prof de Silva said, recalling how successive governments had exploited the committee stage of controversial Bills to pursue their agendas. Prof de Silva cited the passage of the 19th Amendment to the Constitution as a case in point.

Prof de Silva stressed that the Justice Minister’s approval of amendments were certainly not sufficient. Therefore, Supreme Court approval should be a prerequisite for the Speaker’s endorsement, he said.

Having pointed out that the 22nd Amendment had been presented to the public, through Gazette notification, Prof de Silva emphasized that the executive, the legislature and the judiciary were involved in the overall process.

Prof de Silva said that all amendments proposed to the 22 A that would be taken up for vote tomorrow (07) should be defeated. In fact, future attempts to introduce amendments at committee stage of a particular Bill, too, should be thwarted as the Speaker and the Justice Minister whichever party/alliance in power didn’t have the competence to examine the constitutionality of the proposals, Prof de Silva said.

The former diplomat said that the move to dilute executive powers should be examined against the backdrop of President Ranil Wickremesinghe’s failure to secure the required international financial assistance. Declaring that the incumbent government couldn’t obtain at least loans from Western powers let alone grants, Prof de Silva questioned the status of Sri Lanka’s much-touted Staff-Level Agreement with the International Monetary Fund now being contradicted by the government.

Prof de Silva was commenting on Premier Dinesh Gunawardena’s declaration in Parliament on Tuesday (04) that there was only a draft agreement and they were yet to finalize the Staff-Level Agreement with the IMF.

Prof de Silva said that before the finalization of the agreement, the draft agreement should be submitted to the Parliament.

The retired academic said that the government owed an explanation regarding the efforts to introduce constitutional amendments at a time political parties, represented in Parliament, should be concentrating on a tangible economic recovery plan. Prof de Silva asked whether they genuinely expected the introduction of 22 A to the Constitution would really enhance political stability.

Prof de Silva expressed serious concerns about how the powers that be could propose certain amendments at the committee stage of the 22 A with a view to appeasing the Tamil National Alliance (TNA) as well as the Sri Lanka Muslim Congress (SLMC), a constituent party of the main Opposition Samagi Jana Balavegaya (SJB). The retired University Don pointed out the possibility in the government proposing consultations between the appointing authority (the President) and the Chief Ministers in respect of the appointment of Governors of the Provinces. In terms of the Constitution now, the appointment of Governors is the prerogative of the President.

Prof de Silva said that the President couldn’t dilute executive powers enshrined in the Constitution.

India’s SpiceJet to fly to Sri Lanka from Nov 15, Aeroflot Oct 09

India’s Spice Jet will begin flying to Sri Lanka from November 15, boosting arrivals from India while Russia’s Aeroflot will also return from October 09, Tourism Minister Harin Fernando said.

Sri Lanka has carried out a promotional campaign in India taking 50 travel industry representatives to key cities to talk to Indian travel industry representatives, he said.

IndiGo Air is already flying to Sri Lanka, he said.

Air India has also doubled frequencies, Fernando said.

The moves are expected to boost arrivals from India.

India became the top generator of tourism after Sri Lanka scrapped visas to the country about 20 years ago. Now visas to Sri Lanka is easily available online.

The European Winter season is also expected to begin from mid-October, he said.

Aeroflot halted flights to Sri Lanka after courts impounded an aircraft taken from an European lessor.

The aircraft was later released.

Sri Lanka Ministers then ‘apologized’ to Russia.

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High profile Sri Lankan delegation to visit China

A high profile visit of a Sri Lankan delegation to China was discussed when the Foreign Ministers of the two countries met on the sidelines of the 77th Session of the UN General Assembly.

Foreign Minister Ali Sabry had bilateral talks with his Chinese counterpart Wang Yi in New York.

Mr. Sabry told Daily Mirror that a high profile Sri Lankan delegation would undertake an official visit to China possibly in November. However, he did not specify whether it would be at ministerial or presidential levels.

He said the visit would take place once Covid restrictions are eased in Beijing.

“The visit may not take place in October. Possibly it may take place in November,” he said.

China is Sri Lanka’s largest bilateral creditor followed by Japan and India respectively.

Sri Lanka and China have started low level discussions on debt refinancing.

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Difficult to compete with powerful nations in UNHRC – Ali Sabry

Ahead of the vote on the new UN resolution on Sri Lanka, Foreign Minister Ali Sabry says it is difficult to compete with powerful nations in the UN Human Rights Council (UNHRC).

However, whatever the vote result Sri Lanka will stand firm against the new UNHRC resolution, he said speaking to the media from Geneva.

The final draft of the new resolution on Sri Lanka was submitted to the 51st UNHRC session in Geneva today (05) along with the UN Human Rights High Commissioner’s report on the human rights situation in Sri Lanka.

The draft resolution, titled ‘Promoting reconciliation, accountability and human rights in Sri Lanka’ was initially sponsored by the Core Group on Sri Lanka including the UK, US, Germany, Canada, Malawi, Montenegro and North Macedonia.

It has now been signed also by Albania, Australia, Austria, Belgium, Canada, Czechia, Denmark, Estonia, Finland, France, Germany, Iceland, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg, Marshall Islands, the Netherlands, New Zealand, Norway, Slovakia and Sweden.

The resolution, Promoting reconciliation, accountability and human rights in Sri Lanka, will be voted this week at the UN Human Rights Council in Geneva.

The draft requests the Office of the High Commissioner for Human Rights to enhance its monitoring and reporting on the situation of human rights in Sri Lanka, including on progress in reconciliation and accountability and on the human rights impact of the economic crisis and corruption.

The office has also been requested to present oral updates to the Human Rights Council at its 53rd session and 55th sessions and a written update at its 54th session and a comprehensive report that includes further options for advancing accountability at its 57th session in 2024.

The new resolution also expresses concern over the human rights developments since April 2022 including violence against and arrests of peaceful protesters as well as violence against government supporters, resulting in deaths, injuries, destruction and damage to houses of MPs.

The resolution has also sought to extend and reinforce the capacity of the Office of the High Commissioner to collect, consolidate, analyse and preserve information and evidence and to develop possible strategies for future accountability processes for gross violations of human rights or serious violations in Sri Lanka.

On October 6, there will be a vote in the UN Human Rights Council (UNHRC) on the resolution on the human rights situation in Sri Lanka. However, Sri Lanka is expected to lose the vote as it did in March 2021.

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Sri Lanka is expected to lose the UNHRC vote but the resolution will be pointless By P.K.Balachandran

On October 6, when there is voting in the UN Human Rights Council (UNHRC) on a resolution on the human rights situation Sri Lanka, the island nation is expected to lose the vote as it did in March 2021.

But, as seen earlier, the resolution is expected to be infructuous with no follow-up action taking place.

The reason for the continuous stalemate in regard to the implementation of UNHRC resolutions is that the issues taken up by Council and the forces ranged against each other in the Council, reflect geopolitical impulses rather than a genuine interest in the establishment of human rights in Sri Lanka (or any other country for that matter).

Indeed, the UNHRC appears to be just another international arena for playing big-power politics. The teams put together by the big powers reflect existing geopolitical lineups. While the West (the US-led “Core Group”) arm-twists Sri Lanka to tow its geopolitical line (vis-à-vis China), China, Russia and other countries that are at odds with the US, support Sri Lanka. India has its own complex geopolitical axe to grind. It tries to achieve its aims by “abstaining”. Abstention sends out mixed signals to Sri Lanka. On the one hand, India gives a lot of financial and material aid to Sri Lanka, but on the other hand, by not voting for it at the UNHRC, it conveys the message that Sri Lanka should abide by New Delhi’s political and geostrategic wishes viz., implement its plan for devolution of power to the Tamil areas and keep China at bay.

The balance of power in the UNHRC is generally in favor of the West. But this does not really matter to Sri Lanka because no follow-up action ensues from its resolutions. It was only once, in 2010, that the EU withdrew its GSP Plus trade concession. But even that was restored in 2017 supposedly because Sri Lanka had “ratified and implemented measures contained in a number of international conventions on human and labor rights, environment protection and good governance.” But the fact was that there had been no improvement in the rights situation by the yardstick of the UNHRC. The real reason for the restoration was to prevent Sri Lanka from going closer to China.

Sri Lanka lost the March 2021 vote. Out of the 47 members, 22 voted in favor, 11 against and 14 abstained on a resolution empowering the UN to collect and store information that could lead to international criminal proceedings. India, Nepal and Japan abstained while China, Russia, Pakistan and Bangladesh supported Sri Lanka. Currently, Bangladesh is not a member.

The October 2022 draft resolution has been sponsored by 26 countries including ten Council members. It has the same objective of empowering the UN to collect and store information that could lead to international criminal proceedings. It calls for the extension and reinforcement of the Office of the High Commissioner “to collect, consolidate, analyze and preserve information and evidence and to develop possible strategies for future accountability processes for gross violations of human rights or serious violations of international humanitarian law in Sri Lanka.”

However, Sri Lanka is belligerent and will ask for a vote. One of its aims is to show the futility of censure. Sri Lanka’s Foreign Minister Ali Sabry told the Council that the draft resolution providing for an external judicial process is against the Lankan constitution. He also said that “economic crimes”, included in the list of charges this time, are outside the purview of the UNHRC and therefore inadmissible.

Sabry said that Sri Lanka cannot agree to “an outside evidence gathering mechanism and the long-term prosecution of the Sri Lankan armed forces outside Sri Lanka.” He added that if crimes were committed, they must be prosecuted in Sri Lanka (though the domestic commissions and judicial mechanisms to ensure accountability have proved to be ineffective). “Whether we win or lose, there are things on which we cannot compromise,” he declared.

UNHRC resolutions are non-binding. The Council cannot impose any sanctions. However, the UN will have an office with an annual budget of US$ 2.8 million to collect information about war crimes and crimes against humanity committed in Sri Lanka, which is expected to be the Sword of Damocles hanging over its head.

Carrot and Stick Policy

Even as they bring resolution after resolution condemning Sri Lanka, Western nation have not flinched from helping Sri Lanka and supporting its governments. Recently, USAID said that it will provide an additional US$ 65 million in assistance over a five-year period. The assistance falls under the Development Objectives Assistance Agreement (DOAG). This funding is in addition to over US$ 60 million of new humanitarian and fertilizer assistance that Administrator Samantha Power announced in response to the current economic and political crises in Sri Lanka.

At the G7 Summit in June 2022, President Biden announced US$ 20 million in additional assistance to strengthen food security in Sri Lanka. Building on other recent funding announcements from the United States, this newly posted assistance will target Sri Lankans most in need during the current economic crisis. The funding aims to support a school nutrition program that will feed over 800,000 Sri Lankan children and provide food vouchers for over 27,000 pregnant and lactating women over the next 15 months. The U.S. government also announced a third tranche of new funding to address the immediate needs of people hardest hit by the economic crisis in Sri Lanka. This humanitarian assistance, totaling US$ 5.75 million, will provide cash assistance, short-term jobs, and agriculture supplies such as seeds directly to crisis-affected people to meet their basic needs.

US is also collaborating with Sri Lanka in the field of defense. The Offshore Patrol Vessel P 627, which was formally handed over to the Sri Lanka Navy by the US Coast Guard in October 2021, recently departed for Sri Lanka from the Port of Seattle.

The UK too is helping Sri Lanka manage the economic crisis. The UK is providing £3 million of lifesaving support to the most vulnerable and will continue to work with international partners to help crisis-ridden Sri Lanka.

The West is expected to carry on with its carrot and stick policy to bring Sri Lanka under its control so that the island nation stops its lurch towards China.

China too has adopted the carrot and stick policy to keep Sri Lanka under its thumb. Realizing that Sri Lanka needs its money, Beijing closed the financial tap during the 2022 financial crisis to punish Sri Lanka for approaching India and the IMF for help without taking it into confidence. But China has now come back with some aid if only to counter Indian aid of US$ 4 billion and the possibility of an IMF bailout following the conclusion of a Staff level agreement between Sri Lanka and the IMF.

The Chinese government has announced that it will provide a total of US$ 74.2 million in emergency humanitarian aid to Sri Lanka to help the country cope with its current difficulties. In July, 1000 tons of rice arrived. China has now said it would supply 70% of uniforms for school kids.

Given Sri Lanka’s critical geopolitical location, neither the West, nor India nor China, can afford to lose its goodwill and cooperation. And the method adopted to achieve this objective is also the same, namely, using the carrot and the stick.

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Final draft of resolution on Sri Lanka submitted to UNHRC

The Core Group at the United Nations Human Rights Council has produced a 19-point resolution on Sri Lanka.

This is a draft resolution and it has received the support of thirty other countries Albania,* Australia,* Austria,* Belgium,* Bosnia and Herzegovina,* Bulgaria,* Canada,* Croatia,* Cyprus,* Czechia,* Denmark,* Estonia,* Finland, Germany, Greece,* Iceland,* Ireland,* Italy,* Latvia,* Liechtenstein,* Lithuania, Luxembourg, Malawi, Malta,* Montenegro,* Netherlands, New Zealand,* North Macedonia,* Norway,* Portugal,* Romania,* Slovakia,* Slovenia,* Sweden,* Switzerland,* United Kingdom of Great Britain and Northern Ireland and United States of America.

The draft resolution noting with appreciation the work of the Office of the United Nations High Commissioner for Human Rights towards the promotion and protection of human rights and truth, justice, reconciliation and accountability in Sri Lanka, has made the following 19-points.

1.Welcomes the oral update presented by the United Nations High Commissioner for Human Rights to the Human Rights Council at its forty-ninth session and the report of Office of the United Nations High Commissioner for Human Rights presented to the Council at its current session;

2.Also welcomes the engagement of the Government of Sri Lanka with the Office of the High Commissioner and the special procedures of the Human Rights Council, encourages the continuation of such engagement and dialogue, and calls upon Sri Lanka to implement the recommendations made by the Office and to give due consideration to the recommendations made by the special procedures;

3.Expresses concern at the human rights impact of the economic crisis, including as a result of increased food insecurity, severe shortages in fuel, shortages in essential medicines and reductions in household incomes, while stressing the need to promote and protect the rights of the most marginalized and disadvantaged individuals, including daily wage earners, women, children, older persons and persons with disabilities;

4.Also expresses concern at other human rights developments since April 2022, including violence against and the arrests of peaceful protestors, as well as violence against government supporters, resulting in deaths, injuries, destruction and damage to the houses of members of Parliament, and stresses the importance of independent investigations into all attacks and that those found responsible be held to account;

5.Stresses the importance of protecting civilian government functions from militarization and of addressing the independence of the judiciary and key institutions responsible for the promotion and protection of human rights and fundamental freedoms; the grievances and demands of Tamil and Muslim populations; prolonged internal displacement; land disputes; the surveillance, intimidation and harassment of journalists, civil society activists, human rights defenders, families of disappeared persons, and persons involved in memorialization initiatives; and of combating sexual and gender-based violence;

6.Also stresses the importance of a comprehensive accountability process for all violations and abuses of human rights committed in Sri Lanka by all parties, including those abuses by the Liberation Tigers of Tamil Eelam;

7.Notes the persistent lack of independent, impartial, and transparent domestic mechanisms, and stresses the importance of ensuring investigations into, and accountability for, grave violations of human rights;

8.Recognizes the importance of preserving and analysing evidence relating to violations and abuses of human rights and related crimes in Sri Lanka with a view to advancing accountability, and decides to extend and reinforce the capacity of the Office of the High Commissioner to collect, consolidate, analyse and preserve information and evidence and to develop possible strategies for future accountability processes for gross violations of human rights or serious violations of international humanitarian law in Sri Lanka, to advocate for victims and survivors, and to support relevant judicial and other proceedings, including in Member States, with competent jurisdiction;

9.Notes the initial outreach of the Government of Sri Lanka to overseas persons of Sri Lankan origin encompassing all communities and generations, and encourages the Government to engage further in a broad-based consultative process with stakeholders from all affected communities and to provide remedies to achieve meaningful reconciliation, devolution of political authority, an improved situation of human rights, and lasting peace;

10.Urges the Government of Sri Lanka to foster freedom of religion or belief and pluralism by promoting the ability of all religious communities to manifest their religion, and to contribute openly and on an equal footing to society;

11.Also urges the Government of Sri Lanka to take measures to address the marginalization of and discrimination against persons from the Muslim community, and to ensure that Muslims and members of other religions are able to continue to practice their own religious rites, including burial rites;

12.Calls upon the Government of Sri Lanka to ensure the prompt, thorough and impartial investigation and, if warranted, prosecution of all alleged crimes relating to human rights violations and serious violations of international humanitarian law, including for long-standing emblematic cases, with the full participation of victims and their representatives;

13.Also calls upon the Government of Sri Lanka to address the ongoing economic crisis, including by investigating and, where warranted, prosecuting corruption, including where committed by public and former public officials, and stands ready to assist and support independent, impartial and transparent efforts in this regard;

14.Stresses the importance of the effective and independent functioning of the Office on Missing Persons and the Office for Reparations, while noting that the tangible results expected by victims and other stakeholders are yet to be achieved, including resolving the many cases of enforced disappearance so that the families of disappeared persons can know their fate and whereabouts, and also the importance of the effective and independent functioning of the Human Rights Commission of Sri Lanka;

15.Calls upon the Government of Sri Lanka to protect civil society actors, including human rights defenders, to investigate any attacks and to ensure a safe and enabling environment in which civil society can operate free from hindrance, surveillance, insecurity and threat of reprisals;

16.Notes the introduction in March 2022 of amendments to the Prevention of Terrorism Act, that detentions under that law continue, and the expressed intention of the Government of Sri Lanka in this regard to introduce new legislation on combating terrorism, and encourages the Government to engage in consultations with civil society, the Office of the High Commissioner and relevant special procedure mandate holders in the preparation of new legislation, in order to ensure that any legislation on combating terrorism complies fully with the State’s obligations arising from international human rights law and international humanitarian law;

17.Notes with appreciation the continued engagement of the Government of Sri Lanka with the special procedures of the Human Rights Council, and encourages the Government to continue that cooperation, including by responding formally to outstanding requests from them;

18.Encourages the Office of the High Commissioner and relevant special procedure mandate holders to provide, in consultation with and with the concurrence of the Government of Sri Lanka, advice and technical assistance on implementing the above-mentioned steps;

19.Requests the Office of the High Commissioner to enhance its monitoring and reporting on the situation of human rights in Sri Lanka, including on progress in reconciliation and accountability, and on the impact of the economic crisis and corruption on human rights, and to present an oral update to the Human Rights Council at its fifty-third and fifty-fifth sessions, and a written update at its fifty-fourth session and a comprehensive report that includes further options for advancing accountability at its fifty-seventh session, both to be discussed in the context of an interactive dialogue.

Over Rs. 300 b in value wiped out of Colombo stock market

An about-turn in investor sentiment forced the Colombo stock market to suffer continuous setbacks yesterday including a trading halt, though turnover improved.

In the first two days of trading, CSE has seen Rs. 324 billion in value wiped out, increasing the year-to-date dip in market capitalisation to 27% to Rs. 4.01 trillion from Rs. 4.34 trillion (down 21%) as of Friday last week.

The active S&P SL20 Index finished the day losing 5.7% or over 173 points whilst the benchmark ASPI dipped by over 4% or 413 points which NDB Securities described as the highest-day-loss in 23 weeks.

On Monday the intraday loss hit a five-month high of 281 points reflecting an “ominous” start for October after the CSE had enjoyed three consecutive months of gains.

Turnover improved to Rs. 4.5 billion from Rs. 2.5 billion on Monday. Share volume was 188.2 million as against 125 million on Monday.

Asia Securities said the market continued to witness heavy retail selling pressure leading to a sharp drop in both key indices. The decline in the S&P SL20 index triggered the 5% circuit breaker for a second consecutive session, resulting in a 30-minute trade halt in early trading. After the halt was lifted, the market saw an immediate pickup, however recovery momentum fizzled out subsequently as retail selling returned in heavyweight stocks.

EXPO ended as the biggest dragger on the ASPI (-47 points), followed by LIOC (-44 points), VONE (-32 points), HAYL (-25 points), JKH (-21 points), and SAMP (-19 points).

Turnover was led by LIOC (Rs. 1,412 million), EXPO (Rs. 448 million), ACL (Rs. 273 million), and DPL (Rs. 259 million). Among actively trading counters, LIOC (-13.7%), EXPO (-11.4%), ACL (-8.4%), LOFC (-6.0%), CICN (-4.2%), CICX (-7.1%), HAYL (-6.1%), and RICH (-6.2%) closed with sharp losses for the day.

Asia also said foreigners recorded a net inflow of Rs. 21.5 million with net buying most in MELS at Rs. 9.9 million and selling in BIL at Rs. 4.9 million.

First Capital said negative sentiment extended yet another day as the market plunged further into red amidst major panic selling which dragged down the overall investor sentiment.

As a result, the market halted within the first few minutes of the trading as the S&P SL20 index fell by 5.0% from the previous close. After the resumption, index witnessed a gradual recovery yet failed to hold its position as profit booking lingered.

NDB Securities said high net worth and institutional investor participation was noted in Dankotuwa Porcelain, LOLC Finance and CIC Holdings. Mixed interest was observed in Lanka IOC, Expolanka Holdings and ACL Cables whilst retail interest was noted in SMB Leasing (voting and nonvoting), Browns Investments and Renuka Agri Foods.

Energy sector was the top contributor to the market turnover (due to Lanka IOC) whilst the sector index lost 13.03%. The share price of Lanka IOC decreased by Rs. 37.50 (13.70%) to close at Rs. 236.25.

The Capital Goods sector was the second highest contributor to the market turnover (due to ACL Cables) whilst the sector index decreased by 4.90%. The share price of ACL Cables moved down by Rs. 9.05 (8.36%) to close at Rs. 99.20.

Expolanka Holdings, Dankotuwa Porcelain and LOLC Finance were also included amongst the top turnover contributors. The share price of Expolanka Holdings lost Rs. 22.50 (11.41%) to close at Rs. 174.75. The share price of Dankotuwa Porcelain recorded a gain of Rs. 1.50 (5.79%) to close at Rs. 27.40. The share price of LOLC Finance declined by 50 cents (6.02%) to close at Rs. 7.80.

India’s ICRA exits Sri Lanka

The second largest credit rating agency in Sri Lanka, ICRA Lanka Limited (ICRA Lanka), has decided to cease operations, a senior company official told Finance Today.

“We will cease operations within the next month” he said. He claimed that the poor state of Sri Lanka’s economy is primarily to blame.

ICRA Lanka is a fully owned subsidiary of ICRA Limited (ICRA) of India. The company was granted a license by the Securities and Exchange Commission of Sri Lanka (SEC) in May 2011.

The ultimate parent company of the international credit rating agency, Moody’s Investors Service, is ICRA’s indirect majority shareholder.

It is also claimed that the parent company’s ownership shift in India also resulted in the shutdown of its activities in Sri Lanka. Moody’s Investors Service also expressed concerns about the company’s activities in Sri Lanka, citing the country’s unpredictable economic environment.

Around 75 leading corporates in Sri Lanka, including Hayleys PLC and Softlogic Holdings PLC, were obtaining credit and debt rating services from ICRA Lanka. Commercial banks such as Bank of Ceylon, People’s bank and NSB and non-bank financial institutes were among them.

According to reports, Lanka Rating Agency Limited (LRA), a local credit rating agency, is attempting to regain their clients following the closure of ICRA Lanka. ICRA Lanka was also supported by a Technical Services agreement with ICRA, wherein the parent company provides operational support and resources.

Fitch Ratings is Sri Lanka’s leading credit rating agency.

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