REVIVAL OF UNDERPERFORMING ENTERPRISES OR UNDERUTILISED ASSETS ACT

Arrangement of Sections

1. Short title.

2. Acquisition by Government of Underperforming Enterprises and Underutilised Assets.

3. Appointment of a Competent Authority.

4. Shares of the Underperforming Enterprise to vest with the Secretary to the Treasury.

5. Appointment of Compensation Tribunal.

6. Determination of Compensation Tribunal and appeals therefrom.

7. Offences.

8. Sinhala text to prevail in case of inconsistency.

9. Interpretation.

SCHEDULES

43 of 2011.

AN ACT to provide for the effective management, administration or revival of identified Underperforming Enterprises or Underutilised Assets vested in the State through alternate utilisation and the payment of compensation in respect thereof; and to provide for matters connected therewith and incidental thereto.

[Date of Commencement: 11th November, 2011]

1. Short title.

This Act may be cited as the Revival of Underperforming Enterprises or Underutilised Assets Act.

2. Acquisition by Government of Underperforming Enterprises and Underutilised Assets.

(1) With effect from the date of the coming into operation of this Act, where the Underperforming Enterprise or Underutilised Assets specified in Schedule I or Schedule II to this Act, are having an adverse impact on the national economy and thereby on the public interest, the shares of such Underperforming Enterprise and the Underutilised Assets shall with effect from the date of coming into operation of this Act, stand vested in the Secretary to the Treasury for and on behalf of the State.

(2) It shall be the duty of the Competent Authority appointed under section 3 to control, administer and manage or otherwise ensure the revival in keeping with the policy of the Government, through alternate methods of utilisation, such as restructuring or entering into management contracts with regard to such Underperforming Enterprise and Underutilised Assets vested with the Secretary to the Treasury in terms of subsection (1).

(3) No person who was a Director of the Board of Directors of an Underperforming Enterprise which is vested in the Secretary to the Treasury in terms of subsection (1), shall exercise, perform or discharge any power, duty or function with respect to such Enterprise unless expressly authorised to do so in writing by the Competent Authority.

3. Appointment of a Competent Authority.

(1) The Cabinet of Ministers shall appoint in respect of the Underperforming Enterprise or each one or more of the Underutilised Assets as the case may be, vested in the Secretary to the Treasury by subsection (1) of section 2, a person by name or by office, to be the Competent Authority who shall control, administer and manage or ensure the revival of such Enterprise or Assets as the case may be, through alternate utilisation.

(2) A Competent Authority appointed under subsection (1) to control, administer and manage—

(a) the Underperforming Enterprise specified in Schedule I, shall take possession of all movable and immovable property of such Enterprise (including any building belonging to or standing on land belonging to, such Enterprise, together with fixtures or fittings thereto belonging and appurtenant therewith or treated as part and parcel thereof) and shall cause an inventory to be prepared of property wherever it is so possible, in the presence of the person, who on the day prior to the date of the vesting of such Enterprise in the Secretary to the Treasury by subsection (1) of section 2, was the Chairman of the Board of Directors of such Enterprise or an agent duly authorised by such Chairman;

(b) any one or more Underutilised Assets specified in Schedule II, shall take possession of such Asset (including any building and any fixtures or fittings which are part of such building and any building belonging to and appurtenant thereto or treated as part and parcel thereof) and shall cause an inventory to be prepared appropriately wherever it is so possible in the presence of the person, who on the day prior to the date of the vesting of such Assets in the Secretary to the Treasury, was the owner or an agent duly authorised by such owner.

(3) A Competent Authority shall, in the exercise, performance and discharge of his powers, duties and functions, be subject to such general and special directions of the Cabinet of Ministers as may be issued in writing from time to time, having regard to the interest of any workers and the effective management and administration of the enterprise or asset concerned in respect of which such Competent Authority is appointed.

(4) Subject to the provisions of subsection (3), a Competent Authority, appointed to control, manage and administer the affairs of an Underperforming Enterprise or an Underutilised Assets, shall wherever appropriate—

(a) exercise, perform and discharge, all the powers, duties and functions conferred or imposed on, or assigned to, the Board of Directors or any other body which was entrusted with the management of such Enterprise as on the date of vesting of the enterprise in terms of subsection (1) of section 2;

(b) continue with or recommence any business activities of such Enterprise or Asset where deemed appropriate;

(c) restructure such Enterprise or Asset so as to enhance its commercial viability;

(d) make available to such Enterprise or Asset, the resources necessary to perform the duties referred to in paragraph (b) and (c);

(e) ensure the maintenance of a proper accounting system in respect of the financial matters of such Enterprise or Asset;

(f) secure the due payment of wages to the workers of such Enterprise or Asset and due compliance by such Enterprise or Asset of all its statutory dues in relation to such workers;

(g) meet all costs and expenses incurred in the management and administration of the affairs of such Enterprise or Asset;

(h) take such other steps as may be necessary to ensure in the national interest the revival of such Enterprise or Asset through alternate utilisation;

(i) do such other acts as are necessary or incidental to the performance of the duties referred to above.

4. Shares of the Underperforming Enterprise to vest with the Secretary to the Treasury.

(1) The shares held by all share holders of the Underperforming Enterprise which has vested in the Secretary to the Treasury under subsection (1) of section 2 shall, with effect from the date of such vesting, other than where such shares are being held by the Secretary to the Treasury, vest in the Secretary to the Treasury for and on behalf of the State.

(2) The shareholder or shareholders or the owner or owners, as the case may be, of any Underperforming Enterprise or Underutilised Assets as the case may be, shall—

(a) where the shares of any Underperforming Enterprise, held by such shareholders or owners of such enterprise as on the date of the coming into operation of this Act, have vested with the Secretary to the Treasury under subsection (1) of section 2; and

(b) where such Underutilised Assets has, as on the date of the coming into operation of this Act, vested in the Secretary to the Treasury under subsection (1) of section 2,

be entitled to receive prompt, adequate and effective compensation in terms of the succeeding provisions of this Act.

(3) The compensation payable shall—

(a) in relation to an Underperforming Enterprise reflect the value of the shares held by each shareholder in such Enterprise; and

(b) in relation to an Underutilised Asset, reflect the value of such Asset based on the ownership by one or more owners.

5. Appointment of Compensation Tribunal.

(1) The Cabinet of Ministers shall appoint, for the purposes of this Act, a tribunal, to be called the Compensation Tribunal comprising the Chief Valuer and two other persons who are persons having wide experience and who have shown capacity, in commercial valuation.

(2) All claims for the payment of compensation under subsection (2) of section 4 shall be made to the Compensation Tribunal appointed under subsection (1) within a period of two years from the date of vesting.

6. Determination of Compensation Tribunal and appeals therefrom.

(1) The Compensation Tribunal shall on receipt of claim for the payment of compensation and after such inquiry as it deems necessary, make its award on such claim within a period of twelve months from the date on which the claim was received by it.

(2) Any person who is aggrieved by an award made by the Compensation Tribunal may appeal against such award to the Court of Appeal within fourteen days from the date on which the award was communicated to such person, with the leave of the Court of Appeal first had and obtained. The provisions of the Civil Procedure Code relating to appeals to the Court of Appeal from an Order of a District Court shall, mutatis mutandis, apply to the making and hearing of appeals under this section.

(3) All sums awarded as compensation under this Act shall be charged to a separate account opened and operated by the Government, for such purpose only with a licensed commercial bank operating in Sri Lanka, into which account the Government shall make arrangements to hold in escrow, sufficient funds to be able to meet any claim for compensation received by it in terms of this section.

7. Offences.

Any person who with regard to any Underperforming Enterprise or Underutilised Assets vested in the Secretary to the Treasury under subsection (1) of section 2—

(a) refuses or fails to deliver to the Competent Authority possession of any property movable or immovable including any building, plant, machinery or any fittings or fixtures appurtenant thereto and stock in trade of any such Enterprise or Assets;

(b) wilfully or negligently destroys, damages or disables, or causes to be destroyed or damaged or disabled, or wilfully conceals or puts away or causes to be concealed or put away any property of any such Enterprise or Assets; or

(c) prevents or obstructs or directly or indirectly causes any other person to prevent or obstruct, the Competent Authority in taking over the management of or taking possession or control of any building or property of any such Enterprise or Assets,

shall be guilty of an offence under this Act and shall on conviction after summary trial before a Magistrate be liable to imprisonment of either description for a period not exceeding ten years or to a fine not exceeding ten thousand rupees or to both such fine and imprisonment.

8. Sinhala text to prevail in case of inconsistency.

In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.

9. Interpretation.

In this Act—

"Competent Authority” means a Competent Authority appointed under section 3;

"person” includes an individual or any body of persons corporate or unincorporated;

"Underutilised Asset” means—

(a) land that was owned by the Government or a Government Agency and alienated within a period of twenty years prior to the date of the coming into operation of this Act to any person, by transferring freehold or leasehold rights or through a divestiture on the basis that the related operations proposed to be carried out on such land will result in generating employment, foreign exchange earnings or savings or economic activities, beneficial to the public, but where such benefits as aforesaid have not accrued, being prejudicial to the national economy and public interest;

(b) land owned by a person that had been granted within a period of twenty years prior to the date of the coming into operation of this Act, either, any tax incentives under any law relating to the imposition and recovery of any tax incentives under the Board of Investment of Sri Lanka Law, No. 4 of1978 or regulations framed there under or any Government Guarantees, on the basis that the related operations proposed to be carried out by such person will result in generating employment, foreign exchange earnings or savings or economic activities, beneficial to the public, but where such benefits as aforesaid have not accrued, being prejudicial to the national economy and public interest;

"Underperforming Enterprise” means a company or other authority, institution or body established by or under any written law for the time being in force, in which the Government owns shares and where the Government has paid contingent liabilities of such enterprise and the Government is engaged in protracted litigation with regard to such Enterprise, which is prejudicial to the national economy and public interest.

SCHEDULES

SCHEDULE I

Underperformtng Enterprises

1. Hotel Developers (Lanka) Plc (Pq 143)

SCHEDULE II

Underutilised Assets

1. PROPERTY SITUATED AT PETTAH - CHALMERS GRANARIES—

All that allotment of land marked Lot No. 1 depicted in Plan No. PPCO 5228 dated 18.01.1980 made by Surveyor General of the land called Charmers Granaries situated in the District of Colombo, Western Province and which said land is bounded on the North by Main Street, East by Front Street, South by Norris Road and West by Lot 15 in CLP No. 1 and containing in extent A9-R3-P27.2 as per the said Plan No. PPC 5228.

2. PROPERTIES SITUATED AT BADULLA - COLOMBO COMMERCIAL COMPANY—

1. All that allotment of land marked Lot No. 353 depicted in Plan No. FVP 80 Sup. 32 made by the Surveyor General of the land situated at Hingurugamuwa in the District of Badulla, Uva Province and which said land is bounded on the North by Lot 33, Spring Valley Road, East by Lot 33, Spring Valley Road, South by Lot 33 & 102, Spring Valley Road and West by Lot 33 & 102, Spring Valley Road and containing in extent 2 Acres 2 Roods and 3.2 Perches (A2-R2-P3.2) as per the said Plan No. FVP 80 Sup. 32;

2. All that allotment of land marked Lot No. 352 depicted in Plan No. FVP 80 Sup. 31 made by the Surveyor General of the land situated at Hindagoda in the District of Badulla, Uva Province and which said land is bounded on the North by Hanwella Ela, East by Spring Valley Road, South by Spring Valley Road and West by Lot 33 and Hanwella Ela and containing in extent 2 Acres 2 Roods and 28.8 Perches A2-R2-P28.8 as per the said Plan No. FVP 80 Sup. 31;

3. All that allotment of land marked Lot No. 243 depicted in Plan No. FVP 5 Sup. 07 made by the Surveyor General situated at Kanupelella in the District of Badulla, Uva Province and which said land is bounded on the North by Dalada Ela, East by Kuda Oya, South by Kuda Oya and West by Dalada Ela and containing in extent 0 Acres 2 Roods and 6.4 Perches (A0-R2-P6.4 ) as per the said Plan No. FVP 5 Sup. 07;

4. All that allotment of land marked Lot No. 1 depicted in Plan No. PP Ba. 297 made by the Surveyor General situated at Aluthwela Judge's Hill, in the District of Badulla, Uva Province and which said land is bounded on the North by Lot 2 in PPBA 2023, East by Aluth Ela Road, Assessment No. 30A, South by Lot 2 in PPBA 2023 and West by Lot 2 in PPBA 2023 and containing in extent 0 Acres 3 Roods and 25.6 Perches (A0-R3-P25.6) as per the said Plan.

3. PROPERTIES SITUATED AT PETTAH AND NARAHENPITA - LANKA TRACTORS LIMITED—

1. An allotment of land bearing Assessment No. 343, Olcott Mawatha, Colombo 11, situated in the District of Colombo, Western Province and bounded on the North by Garden No. 341, Olcott Mawatha, Garden No. 34 , St Sebastian Hill, South by the canal and on the West by Olcott Mawatha and containing in extent approximately nought acres, two roods and twenty eight perches (A0-R2-P 28), per Plan No. 606 dated 14.10.1994 made by Ranjith Karunaratne L.S;

This section of the article is only available for our subscribers. Please click here to subscribe to a subscription plan to view this part of the article.


Recent Updates

NATIONAL TRANSPORT COMMISSION (AMENDMENT) ACT, NO. 6 OF 2017


ECONOMIC SERVICE CHARGE (AMENDMENT) ACT, NO. 7 OF 2017


CIVIL PROCEDURE CODE (AMENDMENT) ACT, NO. 8 OF 2017


OFFICE ON MISSING PERSONS (ESTABLISHMENT, ADMINISTRATION AND DISCHARGE OF FUNCTIONS) (AMENDMENT) ACT, NO. 9 OF 2017


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


NATIONAL TRANSPORT COMMISSION (AMENDMENT) ACT, NO. 6 OF 2017


ECONOMIC SERVICE CHARGE (AMENDMENT) ACT, NO. 7 OF 2017


CIVIL PROCEDURE CODE (AMENDMENT) ACT, NO. 8 OF 2017


OFFICE ON MISSING PERSONS (ESTABLISHMENT, ADMINISTRATION AND DISCHARGE OF FUNCTIONS) (AMENDMENT) ACT, NO. 9 OF 2017


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


NATIONAL TRANSPORT COMMISSION (AMENDMENT) ACT, NO. 6 OF 2017


ECONOMIC SERVICE CHARGE (AMENDMENT) ACT, NO. 7 OF 2017


CIVIL PROCEDURE CODE (AMENDMENT) ACT, NO. 8 OF 2017


OFFICE ON MISSING PERSONS (ESTABLISHMENT, ADMINISTRATION AND DISCHARGE OF FUNCTIONS) (AMENDMENT) ACT, NO. 9 OF 2017


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


NATIONAL TRANSPORT COMMISSION (AMENDMENT) ACT, NO. 6 OF 2017


ECONOMIC SERVICE CHARGE (AMENDMENT) ACT, NO. 7 OF 2017


CIVIL PROCEDURE CODE (AMENDMENT) ACT, NO. 8 OF 2017


OFFICE ON MISSING PERSONS (ESTABLISHMENT, ADMINISTRATION AND DISCHARGE OF FUNCTIONS) (AMENDMENT) ACT, NO. 9 OF 2017


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


NATIONAL TRANSPORT COMMISSION (AMENDMENT) ACT, NO. 6 OF 2017


ECONOMIC SERVICE CHARGE (AMENDMENT) ACT, NO. 7 OF 2017


CIVIL PROCEDURE CODE (AMENDMENT) ACT, NO. 8 OF 2017


OFFICE ON MISSING PERSONS (ESTABLISHMENT, ADMINISTRATION AND DISCHARGE OF FUNCTIONS) (AMENDMENT) ACT, NO. 9 OF 2017


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


NATIONAL TRANSPORT COMMISSION (AMENDMENT) ACT, NO. 6 OF 2017


ECONOMIC SERVICE CHARGE (AMENDMENT) ACT, NO. 7 OF 2017


CIVIL PROCEDURE CODE (AMENDMENT) ACT, NO. 8 OF 2017


OFFICE ON MISSING PERSONS (ESTABLISHMENT, ADMINISTRATION AND DISCHARGE OF FUNCTIONS) (AMENDMENT) ACT, NO. 9 OF 2017


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


NATIONAL TRANSPORT COMMISSION (AMENDMENT) ACT, NO. 6 OF 2017


ECONOMIC SERVICE CHARGE (AMENDMENT) ACT, NO. 7 OF 2017


CIVIL PROCEDURE CODE (AMENDMENT) ACT, NO. 8 OF 2017


OFFICE ON MISSING PERSONS (ESTABLISHMENT, ADMINISTRATION AND DISCHARGE OF FUNCTIONS) (AMENDMENT) ACT, NO. 9 OF 2017


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


NATIONAL TRANSPORT COMMISSION (AMENDMENT) ACT, NO. 6 OF 2017


ECONOMIC SERVICE CHARGE (AMENDMENT) ACT, NO. 7 OF 2017


CIVIL PROCEDURE CODE (AMENDMENT) ACT, NO. 8 OF 2017


OFFICE ON MISSING PERSONS (ESTABLISHMENT, ADMINISTRATION AND DISCHARGE OF FUNCTIONS) (AMENDMENT) ACT, NO. 9 OF 2017


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015