By Mario Andree
Ceylon FT: Capital market watchdog Securities and Exchange Commission (SEC) Chairman Dr. Nalaka Godahewa told Ceylon FT this week that all investigations into stock market irregularities during the 'mafia' period have been concluded, but did not elaborate on the outcomes.
The Colombo Stock Exchange boomed after the decades-long conflict ended in 2009 fuelled by rampant price manipulations, pumping and dumping, insider trading and front running and two former SEC chiefs Indrani Sugathadasa and Dr. Thilak Karunaratne resigned after trying to stamp out such malpractices.
Sugathadasa, resigning in November 2011, said she did so as a matter of principle, as did Dr. Karunaratne, who resigned in August 2012. He also said 17 investigations into market malpractices were pending when he resigned. He claimed that those being investigated had successfully lobbied the top echelons of government to put an end to such investigations.
The market was divided with a majority of brokers and investors claiming that both Sugathadasa and Dr. Karunaratne were dampening sentiments with their investigations, but four stockbroker firms defended the regulator.
Parliamentary Committee on Public Enterprise Chairman D. E. W. Gunasekara after a hearing on the SEC just before Dr. Karunaratne resigned said the stock exchange was run by several mafias and the government should give the regulator more teeth. Days before resigning, Dr Karunaratne had started work on amending the SEC Act in order to give the regulator more powers to deal with market malpractices.
This week Dr. Godahewa said all investigations started by former Securities and Exchange Commission Chairman Thilak Karunarathne have concluded and that to-date, there were no investigations pending, other than those less than six months old. "The mere fact that the Securities and Exchange Commission starts investigations does not mean that those who are involved are guilty," Dr. Godahewa said.
Good governance and minority shareholders rights activist K. C. Vignarajah, has repeatedly said that the SEC was not doing enough to instil a culture of good governance in the capital market.
Earlier this year he alleged that the SEC, Colombo Stock Exchange (CSE), Secretary to the Treasury, Governor of the Central Bank, Auditors and CA Sri Lanka continued to appease and mollycoddle the crooks.
The country's capital market is in crisis and would only realize its true potential if the regulator brought back credibility by investigating wrongdoing, he said as reported in Ceylon FT.
Vignarajah said regulatory loopholes and 'escape routes' remained, and that they were brazenly exploited.
"There is no inquiry process with the aggrieved shareholders who took up issues, being present when the wrongdoers and errant controlling interest and related parties are investigated. Discretion and secrecy facilitates corruption with files being closed, no reports on the offences, no findings made and fines or deterrent punishments imposed."
www.ceylontoday.lk
Ceylon FT: Capital market watchdog Securities and Exchange Commission (SEC) Chairman Dr. Nalaka Godahewa told Ceylon FT this week that all investigations into stock market irregularities during the 'mafia' period have been concluded, but did not elaborate on the outcomes.
The Colombo Stock Exchange boomed after the decades-long conflict ended in 2009 fuelled by rampant price manipulations, pumping and dumping, insider trading and front running and two former SEC chiefs Indrani Sugathadasa and Dr. Thilak Karunaratne resigned after trying to stamp out such malpractices.
Sugathadasa, resigning in November 2011, said she did so as a matter of principle, as did Dr. Karunaratne, who resigned in August 2012. He also said 17 investigations into market malpractices were pending when he resigned. He claimed that those being investigated had successfully lobbied the top echelons of government to put an end to such investigations.
The market was divided with a majority of brokers and investors claiming that both Sugathadasa and Dr. Karunaratne were dampening sentiments with their investigations, but four stockbroker firms defended the regulator.
Parliamentary Committee on Public Enterprise Chairman D. E. W. Gunasekara after a hearing on the SEC just before Dr. Karunaratne resigned said the stock exchange was run by several mafias and the government should give the regulator more teeth. Days before resigning, Dr Karunaratne had started work on amending the SEC Act in order to give the regulator more powers to deal with market malpractices.
This week Dr. Godahewa said all investigations started by former Securities and Exchange Commission Chairman Thilak Karunarathne have concluded and that to-date, there were no investigations pending, other than those less than six months old. "The mere fact that the Securities and Exchange Commission starts investigations does not mean that those who are involved are guilty," Dr. Godahewa said.
Good governance and minority shareholders rights activist K. C. Vignarajah, has repeatedly said that the SEC was not doing enough to instil a culture of good governance in the capital market.
Earlier this year he alleged that the SEC, Colombo Stock Exchange (CSE), Secretary to the Treasury, Governor of the Central Bank, Auditors and CA Sri Lanka continued to appease and mollycoddle the crooks.
The country's capital market is in crisis and would only realize its true potential if the regulator brought back credibility by investigating wrongdoing, he said as reported in Ceylon FT.
Vignarajah said regulatory loopholes and 'escape routes' remained, and that they were brazenly exploited.
"There is no inquiry process with the aggrieved shareholders who took up issues, being present when the wrongdoers and errant controlling interest and related parties are investigated. Discretion and secrecy facilitates corruption with files being closed, no reports on the offences, no findings made and fines or deterrent punishments imposed."
www.ceylontoday.lk
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