As state-owned enterprises (SOEs) continue to make losses and depend on the Treasury for bailouts, a tweak in rules required for listing would need to be accommodated to encourage such entities to enter the Colombo bourse, a top Colombo Stock Exchange (CSE) official said.
CSE Chairman Dumith Fernando shared that the market operator has looked at the rules for SOEs to fall under a different framework and a new approach is being worked out.
“We will be open to looking at lifting the cap on non-voting shares. We would consider lifting that cap so the government can list on non-voting shares. We may have to change the structure for listing if we have to accommodate some of the state enterprises to make it easy for their entry into the market,” said Fernando while expressing views on having progressive SOEs at the virtual Sri Lanka Economic Summit 2020, which concluded yesterday.
While the SOEs are less inclined to list due to the issues of control, he said that the listing could be done hand-in-hand with the government controls, so that the entities can work towards being conducive and accountable.
By listing, he stressed that these loss-making SOEs will have the opportunity to tap into public funds, maintain control while maintaining societal objectives. In 2019 alone, the losses of SOEs amounted to Rs.150 billion, which was 80 percent of the government’s expenditure on healthcare. (SAA)