By Mario Andree
Ceylon FT: Capital market watchdog, the Securities and Exchange Commission, has managed to contain certain related-party transactions after introducing several regulations and requirements of disclosure, which would be made mandatory by 2016.
However according to SEC Chairman Dr. Nalaka Godahewa, the regulator was not imposing restrictions on businesses but was only keen to ensure transparency for the development of the capital market.
Several international fund managers and local activists repeatedly cautioned on related-
party transactions and requested proper management and transparency to ensure security of public funds.
Dr. Godahewa told Ceylon FT that the recent regulatory approaches taken by the market watchdog had been successful in ensuring transparency in related-party transactions, as many companies have started to disclose all related-party transactions, though it was still not mandated, and the public was talking about it.
He said that the SEC was not imposing restrictions on daily business activities, as 'companies know better how to do their business and improve performance.' However, he said, SEC required full transparency of business activity to safeguard the interest of investors, since 'companies need to disclose everything they do, so that the investor knows what's happening with their valuable assets."
He added that some of the regulations relating to related-party transactions, which are currently voluntarily, would be mandated in 2016 for better governance of the listed companies.
The Carlyle Group managing director for Indonesia Rajiv Louis of the US$ 200 billion fund management firm, which has a portfolio of US$ 20 billion in the Asia Pacific region, early last month said some of the leading fund managers in the world were interested in some emerging economies in Asia such as Sri Lanka, but were reluctant to invest due to poor governance issues such as the prevalence of heavy related party transactions.
Related-party transactions were impeding good governance, he said, as large fund managers were entering companies which yielded profits within five years, and though Sri Lanka was a promising place to make money, the issue of good governance was holding fund managers back.
www.ceylontoday.lk
Ceylon FT: Capital market watchdog, the Securities and Exchange Commission, has managed to contain certain related-party transactions after introducing several regulations and requirements of disclosure, which would be made mandatory by 2016.
However according to SEC Chairman Dr. Nalaka Godahewa, the regulator was not imposing restrictions on businesses but was only keen to ensure transparency for the development of the capital market.
Several international fund managers and local activists repeatedly cautioned on related-
party transactions and requested proper management and transparency to ensure security of public funds.
Dr. Godahewa told Ceylon FT that the recent regulatory approaches taken by the market watchdog had been successful in ensuring transparency in related-party transactions, as many companies have started to disclose all related-party transactions, though it was still not mandated, and the public was talking about it.
He said that the SEC was not imposing restrictions on daily business activities, as 'companies know better how to do their business and improve performance.' However, he said, SEC required full transparency of business activity to safeguard the interest of investors, since 'companies need to disclose everything they do, so that the investor knows what's happening with their valuable assets."
He added that some of the regulations relating to related-party transactions, which are currently voluntarily, would be mandated in 2016 for better governance of the listed companies.
The Carlyle Group managing director for Indonesia Rajiv Louis of the US$ 200 billion fund management firm, which has a portfolio of US$ 20 billion in the Asia Pacific region, early last month said some of the leading fund managers in the world were interested in some emerging economies in Asia such as Sri Lanka, but were reluctant to invest due to poor governance issues such as the prevalence of heavy related party transactions.
Related-party transactions were impeding good governance, he said, as large fund managers were entering companies which yielded profits within five years, and though Sri Lanka was a promising place to make money, the issue of good governance was holding fund managers back.
www.ceylontoday.lk
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