Sri Lanka Telecom appoints president's brother as the new chairman

Jan 22, 2015 (LBO) - P. G. Kumarasingha assumed duties as the New Chairman of Sri Lanka Telecom (SLT) Group, the holding company consisting of seven subsidiaries, on 22nd January, 2015, making him the 8th Chairman of SLT following the company's privatization in 1996.

“Sri Lanka Telecom has a great responsibility towards the people of this country as well as the national economy in lieu of being one of its largest contributors. I am confident that everyone at SLT will support me with dedication, accountability and team spirit” in my efforts to make SLT realize broader and bigger dimensions. “Kumarasingha was quoted in a press release.

Prior to this appointment, Kumarasingha was the CEO and General Manager of the State Timber Corporation and holds the post of Board Director of the Land Reclamation & Development Company Ltd. LRDC Services (Pvt) Ltd., and is also the Financial Consultant for the Araliya Group of Companies (Pvt) Ltd.

Kumarasingha holds a Master of Business Administration from Wayamba University of Sri Lanka, Master of Public Management from Sri Lanka Institute of Development Administration, a post Graduate Diploma in Accountancy and Financial Management from University of Sri Jayawardanapura.

Sri Lanka shares recover from 1-month low; political woes hurt sentiment

Jan 22 (Reuters) - Sri Lankan shares ended slightly higher after hitting one-month lows on Thursday, but concerns over political stability weighed on sentiment as investors awaited the new government's interim budget scheduled for next week.

The main stock index fell 1.37 percent to a one-month low of 7,223.92 in early trade, a day after the government reappointed Thilak Karunaratne as head of the market regulator and said he would investigate suspected deals in the stock market.

The index ended 0.07 percent higher, or 5.19 points, at 7,329.59. It closed at its lowest since Dec. 31 in the previous session.

"There was panic selling in the morning with the announcement of new SEC chairman. But it recovered later in the day, though there is no concrete buying yet," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

After the market close on Wednesday, a government minister said the new administration had reappointed Karunaratne as chief of the Securities and Exchange Commission (SEC).

Karunaratne has been tasked with investigating past stock market deals suspected to involve corruption.

Stockbrokers said Karunaratne's appointment and the investigations would pull down the index in the near term, but would instil confidence over the long term.

"Most of the uncertainty will be settled after the budget next week," Karunaratne told Reuters, adding he would not be "on a witch hunt", while the investigations into alleged corrupt deals would go through.

President Maithripala Sirisena's coalition has promised a 100-day programme to restore democracy and reform the economy before he dissolves parliament for a general election after April 23. It will present an interim budget on Jan. 29 with an aim to cut cost of living.

Shares in Ceylon Tobacco Company Plc rose 2.05 percent, while top conglomerate John Keells Holdings Plc fell 1.39 percent.

Foreign investors, who bought a net 22.07 billion rupees worth of stocks last year, were net buyers of 86.6 million rupees worth of shares on Wednesday. 

($1 = 131.8500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

“I am not sure of heading Sri Lanka Securities & Exchange Commission” – Tilak Karunaratne

Tilak Karunaratne says that he cannot definitely say whether he would be appointed as Chairman of the Sri Lanka Securities & Exchange Commission (SEC) as he is yet to receive a formal appointment as head of this institution.

While expressing his views to www.adaderanabiz.lk, Mr. Karunaratne said though the media had publicized that he would take over as SEC Chairman, an official appointment as such has still not been received by him.

Dr. Nalaka Godahewa who was the SEC Chairman is still in office and has not resigned as yet.
www.adaderana.lk

The Colombo Stock Exchange (CSE) has been named the “Most Sustainable Growth Exchange” in Asia for 2014

The Colombo Stock Exchange (CSE) has been named the “Most Sustainable Growth Exchange” in Asia for 2014 by Capital Finance International (CFI), a print journal and online resource reporting on business, economics and finance, based in the United Kingdom.

The CSE was nominated and shortlisted for the Award based on voting by CFI readers, subscribers and contributors; who include the World Bank, International Monetary Fund (IMF), Pacific Investment Management Company (PIMCO) and Fidelity Investments. Following the nomination and shortlisting the CSE was evaluated against a series of stringent criteria set out by CFI.

The criteria included market leadership, innovation, customer satisfaction, financial performance, implementation of technology, client service, added value advisory, risk management, transparency, compliance, corporate governance, quality of communications and strength of nominations.

According to the CFI Awards Panel “The aim of our Exchanges’ and Brokers Awards programme is to identify service providers (regardless of size) that truly deliver excellence. We set out to provide our readers – and hopefully a far wider audience – with a resource to help them identify Exchanges and Brokerages they should consider when making investment and corporate decisions”.

This is the first time an international award of this nature has been awarded to the CSE, in its 30 year history. This international exposure is likely to attract a greater wealth of foreign investors, building on the momentum gained through the “Invest Sri Lanka – Investor Forums”, held globally.

“We are very pleased with this international recognition and believe that it will be a further impetus to our efforts in attracting foreign investors to the market. As a Frontier Market we are making great strides forward and this is being observed by prominent institutional investors. This was evident in our performance in 2014 where the CSE achieved the highest recorded foreign purchases in its history,” Mr. Vajira Kulatilaka, Chairman the CSE said.

“As an Exchange we are continuously striving towards becoming a world class organization, which exceeds the expectations of all our stakeholders. We have streamlined our processes to international standards; having achieved ISO certifications in the areas of information security, business continuity and information services. Similarly our cutting edge technology provides all industry participants with a trading platform that is multifunctional, secure and accessible. Our efforts towards ensuring sustained growth, for both listed companies and investors, has been duly recognized by this award,” Mr. Rajeeva Bandaranaike CEO of the CSE said.

Ranil takes Central Bank, SEC from Finance Ministry purview

In a major development, Prime Minister Ranil Wickremesinghe, who is also Minister of Policy Planning and Economic Affairs, has taken the Central Bank and the Securities and Exchange Commission under him.

Traditionally these two institutions have come under the Ministry of Finance, a portfolio currently held by Ravi Karunanayake, who on Tuesday said regulatory bodies were being brought under the Prime Minister.

This explains why the Central Bank and the SEC as well as the Public Utilities Commission have been brought under Wickremesinghe’s other portfolio of Policy Plan-ning and Economic Affairs. As per the gazette dated 18 January, Wickremesinghe has got additional subjects Child, Youth and Cultural Affairs as well.

However, insurance industry regulatory body IBSL continues to be within Finance Ministry. Similarly the Consumer Affairs Authority, also a regulatory body, is under the relevant Ministry of Food Security.

Another institution brought under Wickremesinghe is the Employees Trust Fund though the Employees Provident Fund is retained under the new Ministry of Justice and Labour Relations, a portfolio held by Wijeyadasa Rajapakshe.

The Central Bank under previous President Mahinda Rajapaksa regime became very prominent and equally controversial due to the role played by the then Governor Nivard Cabraal.

Deputy Minister of Policy Planning and Economic Affairs is Dr. Harsha de Silva, who was a vociferous critic of the previous administration, especially the Central Bank and its management of the Employees Provident Fund and borrowing program as well as alleged stock market manipulations.

Whilst it appears that the move of bringing the CB and SEC under the Ministry of Policy Planning and Economic Affairs is to ensure better governance, the development drew a mixed response.

Ranil… “In a situation where Cabraal remains as Central Bank Governor, then bringing the monetary authority under Policy Planning and Economic Affairs makes sense so as to ensure better oversight. However, since Cabraal has resigned and a less politically-oriented person will be appointed and given the good governance assurances from President Maithripala and Premier Wickremesinghe regime, the latest move is puzzling,” analysts opined.

“Under the new scheme of things and emphatic assurances, it would have been best that the Central Bank and the SEC were retained with Finance Ministry,” they added.
Top banker Arjuna Mahendran has been reported as the new Central Bank Governor-designate.

Prior to release of the gazette detailing institutions under new ministries, Daily FT popular columnist and former Deputy Governor of the Central Bank W.A. Wijewardena on Monday in his article had a checklist for the new administration with regard to the Central Bank. (See online http://www.ft.lk/2015/01/19/to-regain-lost-credibility-central-bank-should-act-as-impartial-spectator-and-not-as-policy-owner/)

Among other things, Wijewardena emphasised that the central bank must act as an “impartial spectator” and not as a “policy owner.” If this recommendation is relevant, then Central Bank coming under the Ministry of Policy Planning and Economic Affairs could be interpreted as a situation where even under the new administration monetary authority will be a policy owner.

Others said that under the good governance promise of the new Sirisena-Wickremesinghe administration, thoughtemporary, what the Central Bank needs is not a shift of Ministry for oversight but true independence whilst retaining it under the Finance Ministry.

The shift however doesn’t mean the Finance Ministry will be spared of any links to the Central Bank. The Treasury Secretary will continue to be an ex-officio member of the Monetary Board.

In his widely-commended article, Wijewardena’s checklist on the future Central Bank included the following: Central banks are created to serve the people and not politicians; Central Bank can take ownership of only what is in its domain; Central Bank should present an apolitical view; and Central Bank reports should be dispassionate and objective.

With regard to the role of the Central Bank, Wijewardena said: “There are two legally-mandated goals which the Central Bank should seek to achieve. One is to maintain an inflation free world which is known as maintaining price stability. The other is to keep the financial system of the country in good health known as maintaining the financial system stability.

“Policies relating to these two goals are taken by the Central Bank and therefore it has the policy ownership for those policies. All other economic policies are taken by the Government and the Central Bank’s job in relation to them is to review policies independently and apprise the Government of the suitability of those policies.”

The former Deputy Governor emphasised that politicians should learn to honour Central Bank independence and emphasised conscience and not political will should guide Central Bankers. He also added that a subservient Central Bank will be cause of a Government’s electoral defeat and that the Governor should be accepted as an independent professional by the market.

Wijewardena went a step further suggesting the goal of ensuring full independence of the Central Bank could be included under the Sirisena-Wickremesinghe interim Government’s 100-day program which however focuses only on urgent political reforms.

Wijewardena said: “In the present 100-day program of the Government, the job of the Central Bank should be to take ownership of only the two mandates it has been given, namely, the maintenance of economic and price stability and financial system stability. It should not take ownership of the 100-day program, which seeks to establish democracy, rule of law, and good governance by abolishing the authoritarian executive presidency and re-establishing Parliamentary powers. However, the Central Bank can keep educating the public of the value of democracy, good governance and rule of law for long-term sustainable economic growth and improving the quality of life of people. Above all, the Central Bank can use this opportunity to win full independence from the Government since it goes well with the good governance principles being propagated by the Government in its 100-day program.”
www.ft.lk

Central Bank to come under PM A move towards good governance – Eran

By Ravi Ladduwahetty

Ceylon Finance Today: In a far reaching move towards the assured good governance, the government has decided to position the Central Bank of Sri Lanka under the Minister of Policy Planning, Economic Affairs, Child, Youth and Cultural Affairs whose Minister is Prime Minister Ranil Wickremesinghe himself.

This was revealed in the Gazette Extraordinary of 1897/15 of 18 January, which was released yesterday.

Accordingly, some other State sector institutions, which were hitherto under the aegis of the Ministry of Finance and Planning such as the Securities and Exchange Commission, the Employees Trust Fund, the National Insurance Trust Fund, the Department of External Resources and the Department of National Planning too, have been placed under the aegis of the Ministry of Policy Planning, whose Minister is Prime Minister Ranil Wickremesinghe.

This was a strategic move of the government, which was aimed at good governance and transparency. The reason for the chaos all these years was both the Central Bank and the Treasury being under the Minister of Finance and that was why the government decided to segregate the two; Deputy Minister of Highways and Investment Promotion Eran Wickremaratne confirmed to the Ceylon FT last night.

However, he said that there was a conflict of interest of keeping the Central Bank, which managed the Employees' Provident Fund under the Ministry of Finance. "On the one hand, the Central Bank borrows money for the government, which is expected to be at the lowest interest rates, while the Employees' Provident Fund, is expected to deliver the highest rates of return to the stakeholders, he said.

However, he said there would have to be a series of legal amendments to draw the EPF out of the aegis of the Central Bank.

Other important State institutions, which have been placed under the Ministry of Policy Planning are: the Institute of Policy Studies, and the Census and Statistics Department.
www.ceylontoday.lk