In an attempt to quell investor fears, Sri Lanka’s Central bank has announced that the takeover bill is not expropriation.
Defending the newly passed “urgent bill”, the bank said in a statement,
"The ... act does not, in any way, constitute the nationalization or the expropriation of private assets".
They went on to insist that only 37 assets would be targeted and that the running would be handed over to a "competent authority".
One company, owned by the Opposition Leader of the Eastern Provincial Council has filed a petition in Sri lankan courts, appealing against the acquisition of his Sevanagala Sugar Company. The Supreme Court has already rejected four petitions against the newly passed bill.
Also appropriated by the law was a convention centre run by a Singaporean firm, Pico, which had a 25 year build operated transfer agreement with the government.
After the announcement of the legislation being passed the Colombo Stock Exchange fell, with both Fitch Ratings and Moody's Investors Service warning it could harm outside investment.
See our earlier post: Moody's slams government's expropriation bill (Nov 2011)