Transparency International Sri Lanka (TISL) has filed legal action in the Supreme Court challenging the Bill to amend the Companies Act No. 07 of 2007.

The petition was filed in the public interest on 19 June.

The Amendment introduces a critical anti-corruption tool – a Beneficial Ownership Information (BOI) register.

TISL contends that beneficial ownership of a company is a national security imperative, in as much as anonymous or opaque corporate structures are frequently used for transnational illicit financial flows, funding of organised crime and terrorism, fronts for foreign influence operations, and laundering proceeds of crime. A BOI register ensures that companies disclose the individuals who ultimately own or control them, thereby exposing hidden ownership structures that facilitate corruption, money-laundering, illicit financial flows, conflicts of interest, and tax evasion. This reform has been a longstanding demand of TISL and is central to Sri Lanka’s post-crisis governance agenda, which aims to restore public trust and economic stability.

Despite the importance of this, the draft Bill falls short of establishing an effective and transparent BOI register. Clause 7 of the Bill, which adds Sections 130A-130J on BOI, restricts public access to meaningful information.

• Section 130A(6) merely obliges the Registrar to maintain a list, without mandating proactive digital publication or integration with other State databases.
• Section 130D limits public access to only the full name and nature of ownership – and even that is released solely on an individual, upon-request basis.

TISL said this structure locks vital BOI behind cumbersome procedures, delays access, and deprives investigators, journalists, and the public of timely data. The limited information required to be disclosed at the outset is insufficient for the meaningful identification of hidden assets, conflicts of interest, and other potential unlawful activity.

The Government has officially pledged – in the Governance Action Plan 2025 and the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) National Anti-Corruption Action Plan 2025-2029 – to establish a publicly accessible online BOI register. By opting instead for a request-driven, partial-information model, the Bill contradicts those commitments and weakens Sri Lanka’s credibility. Ineffective access also conflicts with international standards, and the International Monetary Fund (IMF) Governance Diagnostic Assessment (2023), both of which call for open, verifiable BOI registers. It prevents Obliged Entities such as banks, law firms, accountants, auditors, real-estate agents, etc. access to vital information to enhance anti-money laundering efforts.

TISL said time is critical in asset recovery, fraud detection, and the prevention of asset dissipation. Watchdogs, journalists, and authorities must be able to trace, flag, and freeze assets swiftly. While the incorporation of the Right to Information framework is recognised, the proactive disclosure of key information at the outset, while being mindful of data protection and privacy laws, is essential to enable timely detection of illegal activity.

The petition requests the Supreme Court to determine that Clause 7 of the Bill is inconsistent with and/or violates Article 12(1) and Article 14A of the Constitution that enshrines the Right to Equal Protection of the Law and Right of Access to Information.

(ft.lk)

(Except for the headline, this story, originally published by ft.lk has not been edited by SLM staff)