Sri Lanka emphasises equitisation to reform SOEs and bolster capital markets

The government is prioritising equitisation as a key strategy to enhance the governance of state-owned enterprises (SOEs) and inject liquidity into the capital market, instead of embracing full privatisation, which has garnered negative sentiment among the Sri Lankan public, according to the comments by Securities and Exchange Commission of Sri Lanka (SEC) Chairman Senior Professor Hareendra Dissanadara.

- By NISHEL FERNANDO

Prof. Dissanadara emphasized the significant role equitisation could play in Sri Lanka, clarifying that while privatisation has a defined structure, equitisation offers a distinct pathway. He drew comparisons with countries like Vietnam to illustrate the potential public sentiment. To gain public support, it remains critical to address corruption, ensure transparency and protect worker rights.

Labour Minister and Economic Development Deputy Minister Dr. Anil Jayantha indicated the government’s openness to these mechanisms, provided the appropriate processes. This stance suggests a potential increase in SOE participation in the capital market, which could enhance market liquidity and create new opportunities for investors.