Business

Sri Lanka’s highly publicised state-sector reform drive once championed as a cornerstone of economic recovery is now under sharp scrutiny after a new audit revealed widespread delays, missing documentation and a growing burden of unmonitored liabilities across dozens of state-owned enterprises (SOEs).

The Auditor General’s Department has warned that the reform process is failing to deliver on its promise, leaving the public sector weighed down by “ghost entities” that continue to drain state resources.

Government records show 30 public companies and two public corporations officially classified as “non-operative.” However, the audit found that even the most basic information on many of these entities such as formal resolutions, financial statements, and in some cases their full identity remains unavailable.

This opacity has effectively turned them into untracked fiscal liabilities, making it impossible to determine the true financial exposure to the state.

For example, the Sri Lanka Rubber Manufacturing & Export Corporation (SLRMEC) has ceased operations and leased its Elpitiya foam-rubber factory, while the Co-operative Wholesale Establishment (CWE) retired all its staff by September 2023.

Yet despite being non-functional, several SOEs have not begun the legally required liquidation process. As of 31 July 2024, only four of the twelve entities slated for closure had formally entered liquidation, while six remained in complete limbo.

Compounding the problem, the audit highlights major data gaps. Even identifying all twelve dormant entities proved challenging. Well-known loss-making SOEs such as the Janatha Estates Development Board (JEDB) and the Sri Lanka State

Plantations Corporation (SLSPC) appear on various dormant lists, while lesser-known companies, including Lanka Cement Corporation Ltd, Selendiva Investments Ltd, and Magampura Ports Management Company (Pvt) Ltd, are still awaiting closure decisions.

The fiscal consequences are significant. A separate government study cited in the audit found that 20 SOEs incurred Rs. 850 billion in combined losses, and auditors warn that even a fraction of this attributable to non-operating entities represents a substantial drain on public finances.

The report stresses that dormant SOEs are “not inert they continue to carry costs, liabilities and opportunity losses,” despite contributing nothing to the economy.

The Ministry of Finance, identified as the key authority responsible for implementing closures, faces criticism for prolonged delays that “speak volumes about implementation failure.” As the country works to rebuild fiscal credibility under an IMF-supported programme, the continued presence of these ghost entities undermines reform momentum and risks eroding investor confidence.

The Auditor General recommends swift corrective action, including:

• Publishing a complete, updated list of dormant SOEs with recent financial data;
• Assigning each entity a clear exit path—revival, merger or liquidation—with strict timelines;
• Initiating and completing all pending liquidation processes without further delay.

Until these steps are taken, Sri Lanka’s dormant SOEs will remain a silent but costly burden, symbolising the widening gap between reform rhetoric and real execution.

In a major stock market move worth Rs. 2.57 billion, Sri Lankan business magnate Dhammika Perera has acquired a 40% stake in Harischandra Mills PLC, a long-established listed company on the Colombo Stock Exchange.

The transaction took place this morning (17), with Perera purchasing 778,946 shares from Senthilverl Holdings (Pvt) Ltd, the investment arm of Dr. T. Senthilverl, at Rs. 3,300 per share, according to market sources.

This marks Perera’s fourth major acquisition this year, underscoring his aggressive expansion strategy across key sectors. In September, his investment arm, Vallibel One, together with its subsidiary LB Finance PLC, announced the acquisition of a controlling stake in Associated Motor Finance Company PLC.

Meanwhile, 2025 has been a defining year for the tycoon, as he initiated two other major takeovers — including a high-profile merger involving LOLC Holdings and Vallibel Three Ltd. Earlier, on July 8, Perera also took over a controlling stake in East West Properties PLC, investing approximately Rs. 3.23 billion in that deal.

Dhammika Perera’s latest acquisition further cements his position as one of Sri Lanka’s most influential and expansion-driven business leaders, with a keen eye for strategic growth across diverse industries.

In a significant breakthrough for Sri Lanka’s electric vehicle import sector, John Keells CG Auto (JKCG) the official agent for BYD announced that the Court of Appeal has directed the release of hundreds of detained electric vehicles following weeks of legal wrangling with Sri Lanka Customs over disputed motor power classifications.

In its latest statement, JKCG confirmed that it had filed two additional Writ Applications on 26 September and 2 October 2025, challenging the continued detention of 631 electric vehicles, including the popular BYD ATTO 1 and ATTO 2 models. The company said that on 11 November 2025, Customs agreed in court to release the vehicles under corporate and bank guarantees, marking a major relief for customers and importers caught in the standoff.

The dispute, which has dominated the electric vehicle market for months, centres on whether the detained vehicles exceed the 100 kW motor capacity threshold declared by importers. Customs officials allege that certain BYD models may actually contain 150 kW motors, which would make them subject to a higher excise duty  approximately LKR 5.4 million per unit, compared with LKR 2.4 million for the 100 kW variant.

JKCG, while contesting Customs’ interpretation, said it had acted in good faith by offering Corporate Guarantees for one category of vehicles and Bank Guarantees for the rest, to cover any potential tax differentials pending the outcome of testing and verification. Though initially rejected, this arrangement was later accepted in court, allowing Customs to begin releasing the shipments.

In its statement, JKCG reiterated that “the globally accepted norm for vehicle clearance is for Customs to rely on the Manufacturer’s Certificate,” and that any technical verification, if required, “should be conducted in an internationally accredited motor laboratory to ensure accuracy, credibility, and consistency.”

The company also drew attention to Customs’ delays in conducting power-verification tests. JKCG said it had filed an affidavit offering to provide the necessary technical equipment and scanning machines to assist Customs in verifying motor capacity. In line with that, the company made available a Vehicle Diagnostics Service (VDS)  a specialised tool that connects to the vehicle’s onboard diagnostics (OBD) system for motor and software verification  on 6 November 2025. However, Customs did not proceed with testing that day and has since informed the Court it will determine next steps.

JKCG acknowledged that the prolonged detention had caused serious inconvenience to customers who had pre-ordered vehicles amid growing demand for EVs following the post-pandemic import liberalisation. The company thanked buyers for their patience, saying the release order “will now enable us to fulfil our obligations and deliver the vehicles without further delay.”

Industry analysts note that the case could set a precedent for how electric vehicles are classified, taxed, and verified in Sri Lanka, especially as BYD continues to dominate the market since the lifting of the import ban in 2023. The ruling also highlights the need for clearer technical standards and greater transparency in customs assessments, as the country seeks to promote electric mobility while safeguarding state revenue.

With the court-directed release now underway, attention will turn to whether Customs introduces new testing protocols or international verification partnerships to prevent similar disputes in the future  a step that could help restore investor confidence and support Sri Lanka’s clean-transport transition.

Giga Foods (Pvt) Ltd, one of Sri Lanka’s fastest-growing multi-brand food companies, has opened a new outlet at Colombo City Centre (CCC). The outlet brings together three of its popular brands—Full’r Burgers, Indian Affair, and Solo Bowl—under one roof.

Giga Foods is known for its promise: “Every meal, every time; exceptional taste, consistent quality, and dependable service.” The new CCC outlet reflects the company’s goal of creating a place where different cuisines come together in one location.

Customers can enjoy a variety of meals, from burgers and biryanis to healthy wraps and bowls, suitable for families, quick lunches, or light dinners.

With this opening, Giga Foods strengthens its role in Sri Lanka’s food and beverage industry, offering quality, affordability, and a great dining experience.

AMG Critical Materials N.V. (AMG) has announced the sale of its subsidiary, Graphit Kropfmühl GmbH (GK), to Asbury Carbons Inc., a portfolio company of Mill Rock Capital, marking AMG’s complete exit from the natural graphite business. The deal, valued at $65 million, positions Asbury Carbons to expand its global graphite operations, including in Sri Lanka.

GK’s Global Operations and Sri Lankan Link

GK operates a graphite mine in Kropfmühl, Germany, and holds a majority stake in Bogala Graphite Lanka PLC, which manages one of Sri Lanka’s oldest graphite mines. The acquisition includes all GK operations and approximately 350 employees worldwide. For the 12 months ending August 2025, GK recorded $65 million in revenue, reflecting stable performance despite challenges in the natural graphite market.

Following the announcement, Bogala Graphite Lanka PLC shares surged 25%, closing at Rs. 137, driven by investor optimism about Asbury’s potential to boost Sri Lanka’s graphite production and market reach.

Commenting on the divestment, AMG CEO and Management Board Chairman Dr. Heinz Schimmelbusch said the sale underlines AMG’s focus on strategic portfolio management. “While natural graphite remains an attractive industry, GK did not achieve the scale required to compete as a major supplier to the battery anode market. Under Asbury Carbons, GK will have better prospects for growth,” he stated.

Schimmelbusch added that the proceeds would be used to strengthen AMG’s balance sheet and invest in its core growth areas, particularly critical materials essential for clean energy technologies.

Full Ownership Before Sale

This sale follows AMG’s March 2025 repurchase of the remaining 40% of GK shares from Alterna Capital Partners, finalizing full ownership before the divestment. Under the agreement, AMG can settle the purchase in cash within three years or opt for AMG shares at its discretion.

Asbury’s Expansion Strategy

Asbury Carbons, headquartered in Asbury, New Jersey, is a global leader in carbon-based materials with over 300 employees across 10 facilities in North America and Europe. The company supplies graphite and carbon solutions to industrial clients in steel, automotive, energy, and technology sectors.

Gregg Jones, CEO and Chairman of Asbury Carbons, described the acquisition as a strategic milestone: “Bringing together Asbury and GK combines over 250 years of collective expertise. This move enhances our global supply chain resilience and allows us to deliver advanced carbon technologies to our clients.”

The transaction, pending customary regulatory approvals, is expected to close by the end of 2025. Analysts note that the sale underscores shifting dynamics in the graphite industry, as demand for battery-grade materials intensifies amid global energy transitions.With Asbury’s entry into the Sri Lankan graphite sector through GK’s majority stake in Bogala Graphite, industry observers anticipate renewed foreign investment interest and potential expansion in Sri Lanka’s high-purity graphite exports a critical component in electric vehicle and battery manufacturing.

CBL Group has partnered with Saudi Arabia’s Aamalcom Holdings to expand its business in the country. CBL, one of Sri Lanka’s largest food producers and exporters, sells products in over 65 countries.

The agreement was signed in Colombo by Sheikh Kinan Rashdan Al Maral, Chairman of Aamalcom, and Rasith Wikramasinghe, CBL Group Director.

Under the deal, CBL’s top brands—Munchee, Ritzbury, and Tiara—will be widely distributed in Riyadh from November 2025, and later in Jeddah, Dammam, Madinah, and Qassim. Distribution will start with major retail chains and later expand to supermarkets, wholesale stores, food outlets, and e-commerce.

Rasith Wikramasinghe said the partnership is a key step in CBL’s export growth, while Sheikh Kinan Rashdan Al Maral said it will allow them to provide excellent service to consumers across Saudi Arabia.

Founded in 1968, CBL Group has grown into a major international company committed to sustainability, innovation, and community development. This partnership will further strengthen its global presence.

The government’s ambitious programme to establish five technology parks across Sri Lanka has hit a major barrier, as projects in Galle and Kurunegala — launched in 2021 and touted as key to the nation’s digital-economy push  are now abandoned and racking up huge financial losses.

According to government audit data, construction at both parks was suspended as of 5 February 2024, the date of a physical inspection of the sites. 

The parks were to be delivered under the umbrella of the Techno Park Development Company (Pvt) Ltd. (TPDC), a state-owned entity created by the cabinet to set up "commercial enterprise" techno parks in five districts, namely Galle, Kurunegala, Anuradhapura, Kandy and Batticaloa. 

Clause 14.6 of the contracts for the Galle and Kurunegala parks stipulates hefty liquidated damages for delays. The Galle project carries a penalty of Rs. 236.36 million; Kurunegala’s is Rs. 416.8 million totalling a potential government loss of Rs. 653.16 million.

In addition, outstanding payments are piling up: as at 31 March 2022, Rs. 950.6 million was still owed to the Galle park contractor. Engineering consultants for Galle and Kurunegala are owed Rs. 18.17 million (since April 2022) and Rs. 36.19 million (by end 2023) respectively.

The initiative envisaged techno parks over 30-acre sites that would host R&D labs, software development firms, incubators, and advanced manufacturing. For example:

Galle’s 31-acre site in Walahanduwa, Akmeemana, planned a built-up floor area of 45,684 m² with office units, restaurants and clubhouse. 

Kurunegala’s site in Rathgalla offered 14 acres (11 + 3) and a proposed floor area of 31,147 m². 

According to the 2021 budget, the first two parks (Galle & Kurunegala) were already under way, with three more expected by 2023 in Nuwara Eliya (Mahagasthota), Kandy (Digana) and Habarana. 

The objective: to build a “techno-entrepreneurship driven economy,” tapping Sri Lanka’s human resources and strategic locations.

Despite the optimism, progress has stalled. According to news reports, by mid-2024 the parks had been abandoned and the projects flagged for revival under the direction of Dinesh Gunawardena (Prime Minister) who initiated steps to rescue the Galle and Kurunegala sites. 

Key issues include unclear timelines, weak project management, delayed contractor performance and mounting liabilities.

The lapse comes at a time when Sri Lanka is seeking to strengthen its digital economy and technology export base. Failure to realize these infrastructure projects undermines investor confidence, leaves committed capital stranded and jeopardises the strategic goal of technology-driven growth. Meanwhile, mounting penalty and unpaid-billing figures add strain on public finances already under pressure.

Reviving such large-scale infrastructure requires robust governance, accountability mechanisms and clear timelines. The TPDC’s mandate to list on the Colombo Stock Exchange and allow private investors (as outlined in the 2021 cabinet decision) may need stronger enforcement. 

More importantly, contracts must include enforceable milestones, and project oversight must be professionally sustained if the techno park strategy is to deliver value.As Sri Lanka re-positions itself for the Fourth Industrial Revolution, the techno park programme’s stalled start serves as a caution: bold vision must be matched by disciplined execution. The nations’ technology aspirations risk being held back by idle buildings and overdue invoices unless urgent corrective action is taken.

The “Industry Expo 2025,” the country’s largest industrial exhibition organized by the Industrial Development Board (IDB) under the Ministry of Industries and Enterprise Development, commenced today (18) at the BMICH under the patronage of Minister Sunil Handunnetti and Deputy Minister Chathuranga Abeysinghe.

The four-day exhibition, running until September 21, features 450 stalls representing 25 industrial sectors, along with an Innovation Arena, school entrepreneurship showcases, engineering and research services, and a “One Stop Service” center bringing together all state institutions and banks supporting industry.

The Sri Lanka–Thailand Business Council held its 24th AGM recently with the presence of key stakeholders and members present.

The Council continues to play a pivotal role in strengthening trade, investment, and tourism ties between the two friendly nations. Rooted in centuries of shared cultural and religious heritage, the bond between Sri Lanka and Thailand has evolved into a partnership that blends tradition with modern economic collaboration. The Council, which will celebrate its 25th anniversary next year, has been a cornerstone of this progress, fostering dialogue and cooperation between the private sectors of both countries.

Rizan Nazeer, one of the founding members of the Council, was appointed as its President.

Rizan Nazeer

With his long-standing commitment to enhancing Sri Lanka–Thailand relations, Nazeer brings both experience and vision to the role. He stated that the Council has many plans underway to support the government’s efforts to strengthen trade, economic, and tourism relations between the two nations. He also highlighted the significance of the Sri Lanka–Thailand Free Trade Agreement (FTA), signed in February 2024, which aims to eliminate tariffs on nearly 85 percent of traded goods within six years. The agreement, once implemented, is expected to raise bilateral trade, currently valued at around US$350 million, to over a billion dollars in the near future.

He emphasised that the Council’s focus will be on fostering greater private-sector engagement, encouraging joint ventures, and expanding cooperation in key areas such as agriculture, food processing, health and wellness, tourism, renewable energy, and technology. The Council also plans to empower small and medium enterprises by helping them gain access to new markets and meet international quality standards, thereby enabling them to benefit from the opportunities that will arise through enhanced bilateral cooperation.

Over the years, the Sri Lanka–Thailand Business Council has organised numerous business forums, trade missions, and networking events in collaboration with the Board of Trade of Thailand, Thai Sri Lanka Chamber of Commerce and other partners. These initiatives have opened new avenues for business and investment, while also strengthening cultural understanding and people-to-people connections between the two countries.

As the Council approaches its 25th year of dedicated service, it stands as a symbol of enduring friendship and forward-looking cooperation between Sri Lanka and Thailand. Under the leadership of the President and the Executive committee the Council is poised to guide this partnership into a new era of shared prosperity, reinforcing its commitment to economic growth, tourism promotion, and mutual progress for both nations.

The Executive Committee of the Sri Lanka Thailand Business Council for the year 2025/2026:

• President Rizan Nazeer (Transtrade International)
• Immediate Past President Dushyantha Basnayake (Medimarket Ltd),
• Vice Presidents Kamil Weerasekara (Peter Weerasekara Foundation), A.M. Musajee (M.M. Noorbhoy & Co. Ltd.)
• Secretary Priyantha Kolonnage (Pyramid Wilmar Ltd.),
• Assistant Secretary Rohan Elgiriyawithana (Mazuma Lanka and Chanlanka)
• Treasurer Yashoda Peiris (Waruna Publishers)
• Asst. Treasurer Abdul Saliheen (Paramount Impex Ltd.).

Committee Members: Rienzie Fernando (Roots Global Ltd.), Asim Mukthar (Lanka Exhibition & Conference Service Ltd.), Asitha Panabokke (Mahaweli Reach Hotel), Deepal Abeysekara (Infinity Gift Cards), Chandana Nanayakkara (Siam City Cement Lanka Ltd.), Asela Inddawala (SKYNET Consulting Ltd.), Harendra Abeysundara (Oceanway Ltd.), Past President Lalith Kumarage (Alucare Ltd.), and Founder and Past President Lional Fernando (Benjarong Ltd.).

(Source - ft.lk)

A pre-budget discussion on the automobile and electronic equipment industries was held yesterday (16) at the Presidential Secretariat, chaired by Minister of Labour and Deputy Minister of Economic Development Dr. Anil Jayantha Perananthu.

Importers of automobiles and electronic goods pledged full support for the government’s economic development programs led by President Anura Kumara Dissanayake. Vehicle importers also submitted several proposals for the upcoming budget, noting that recent policy decisions had broadened the sector.

Electronic goods importers raised concerns over unregulated imports by organized groups, which undermine quality standards, distort the market, and deprive the government of significant tax revenue. They urged prompt government intervention.

Minister Dr. Perananthu assured that all constructive proposals will be considered in preparing the budget and emphasized the government’s commitment to ensuring quality imports, even by introducing new regulations if necessary. He also stressed that strict legal action will be taken against groups evading taxes through illegal imports.

The meeting was attended by senior officials, including Presidential Senior Additional Secretary Kapila Janaka Bandara, Export Development Board Chairman Mangala Wijesinghe, Finance Ministry officials, and representatives from the automobile and electronics import industries.

Hayleys PLC, Sri Lanka’s most diversified conglomerate, is set to make a strategic entry into the large-scale supermarket sector, marking a new chapter in its 148-year legacy of diversification and value creation.

The move reflects the Group’s commitment to bringing quality, reliability, and exceptional service closer to everyday Sri Lankan consumers, while redefining the modern retail experience.

Leveraging its extensive value chains, strong brand presence, experienced leadership, and focus on sustainable business, Hayleys aims to build a value-driven retail ecosystem across the island.

In Phase 1, the Group plans to launch 100 outlets strategically located in key urban and suburban areas. This expansion is expected to diversify its earnings profile, enhance long-term financial stability, and generate broad-based value for stakeholders.

With improving macroeconomic conditions, rising urbanisation, and increasingly sophisticated consumer lifestyles, Hayleys sees significant growth potential in the country’s retail sector.

The venture will utilise the Group’s expertise in logistics, manufacturing, and service excellence to offer customers better accessibility, higher quality, and a wider choice, reaffirming Hayleys’ enduring commitment to inclusive growth and national development.

Global investment flows are shifting, and emerging markets are under pressure to prove their competitiveness. For Sri Lanka, securing stronger investor confidence and translating reforms into tangible opportunities will be decisive in the years ahead. On Day Two (December 3rd) of the Sri Lanka Economic & Investment Summit 2025, the session “Where Sri Lanka Stands and What Comes Next?” will deliver a frank assessment of the investment climate and the road forward.

This high-level discussion will bring together key leaders from investment promotion, capital markets, exports, and private equity to examine the country’s investment trajectory. The session will explore how Sri Lanka can accelerate much-needed reforms, mitigate risks, and unlock new opportunities to position itself as a credible and attractive destination for both local and international investors.

The panel will feature Mr. Arjuna Herath - Chairman, Board of Investment of Sri Lanka, Mr. Dimuthu Abeyesekera - Chairman, Colombo Stock Exchange, Mr. Mangala Wijesinghe - Chairman & Chief Executive, Sri Lanka Export Development Board, and Mr. K.A. Vimalenthirarajah, - Secretary, Ministry of Trade, Commerce and Food Security. Mr. Supun Weerasinghe, Group CEO, Dialog Axiata PLCand Board Member of the Ceylon Chamberwill moderate the session.

SLEIS 2025 is supported by: Platinum sponsors - Nestle, Standard Chartered Bank, Unilever, Bronze sponsor - South Asia Gateway Terminals, Session sponsor - Sunshine Holdings, Television Partner - Dialog Television, Telecommunications Partner - Dialog, Hospitality Partner - Shangri-La Hotel, Colombo, Strategic Partners - Ministry of Foreign Affairs, Department of Commerce, Ministry of Trade, Commerce, Food Security and Co-operative Development, Board of Investment, Export Development Board, Sri Lanka Convention Bureau, Strategic Development Partner - Asian Development Bank, Knowledge Partner - World Bank, and Official Airline - SriLankan Airlines.

The Sri Lanka Economic and Investment Summit will be held on December 2nd and 3rd at the Shangri-La Hotel Colombo. Early registration is encouraged to secure your place – register now at https://sleis.chamber.lk/. For more information, contact Alikie – 0115588805 / This email address is being protected from spambots. You need JavaScript enabled to view it. or Lilakshi – 0115588818 / This email address is being protected from spambots. You need JavaScript enabled to view it..

(bizenglish.adaderana.lk)