June 04, 2007 (LBO) – Sri Lanka’s new company law should encourage good governance and help deter boardroom abuses that have given the corporate sector a bad name, experts said. This act is easy to understand and reader friendly so you can read and understand your responsibilities, Cabraal said. The new companies act should only be feared by the crony directors but the good directors has nothing to worry about, Attorney-at-law and a member of the Companies Act advisory committee Harsha Cabraal said.
The new companies act came into effect on May 03, 2007. It aims to improve Sri Lanka’s corporate management practices and reduce the incidence of mismanagement.
Some say this is a draconian law but I do not call it so. Things are changing, globally it has happened. In Sri Lanka it is happening, Cabraal said.
Because of over trading, asset stripping, siphoning of funds, major corporate collapses a need arose to streamline (corporate management practices) and arrest this problem.
Cabraal was speaking at a symposium on the Companies Act organized by Hayleys AIG Insurance for the corporate sector.
The need for stringent laws has been evolv