Tuesday 8 December 2015

SEC reopens ERI case

By Ishara Gamage

Ceylon Finance Today: Sri Lanka's Securities and Exchange Commission (SEC) has started a fresh investigation against former Environmental Resources Investments PLC (ERI) Directors for alleged stock market manipulation, SEC sources told Ceylon FT.


They also said that SEC has also reopened cases against the directors of two other companies also on the same charges.

When contacted, SEC chairman Thilak Karunaratne, on the ERI case said, "I neither accept nor reject the reopening of the ERI case.

But there are several legal angles which we can take in to consideration.
According to those legal angles we have the power to reopen closed cases."
Meanwhile, last month, speaking to media, the SEC Chairman said that the SEC has reopened three cases as part of probes that will be carried out by an expanded investigations and enforcement division. An SEC reorganization will be completed in November 2016, and an upgraded surveillance system will be in place next year, Karunaratne had told Lanka Business Online.

"When the new commission took over I impressed upon them the need to revisit these cases," he said.

Earlier, SEC had fined ERI and three directors for giving misleading information and not revealing material information about the firm in time.

ERI has been asked to pay Rs 3.3 million, executive directors Kosala Heengama and Gregory Scott New some Rs 3.3 million each and chairman Lalith Heengama Rs 500,000.
Independent directors G.S. Munasinghe and H.B. Dissanayake had had been warned.


Few months ago Prime Minister Ranil Wickremesinghe slammed corrupt sections of Sri Lanka's private sector to the extent of naming few businessmen including ERI's former directors Scott New man and Kosala Heengama.

"There are a number of allegations of violations of the Colombo Stock Exchange market rules and Securities and Exchange Commission regulations. The minor ones were compounded. Thirteen large cases were abandoned purportedly due to the lack of evidence," Prime Minister had told parliament.

"I would like this to be recorded in the Hansard. I have requested the Securities and Exchange Commission to go into these cases. If necessary, I will bring legislation to permit such inquiry. I am also seeking the appointment of a Parliamentary Select Committee to inquire into these transactions. Since some of the issues raised are under consideration by the committee, I prefer to give an answer elaborately after the report is submitted. We plan to table this report in Parliament," he had then said.

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