Sri Lanka’s Central Bank governor appointed

Jan 24, 2015 (LBO) – Sri Lanka President Maithripala Sirisena has appointed Arjuna Mahendran, an international investment banker as the Governor of Sri Lanka's Central Bank, the president's office said.

Mahendran has headed Sri Lanka's Board of Investment (BOI) from 2002 to 2004 when Ranil Wickramasinghe was the Prime Minister.

State banks, Stock Exchange, corporations under scrutiny: PM

11-member special council to evolve ways to tackle flood of allegations

A number of state financial institutions will be probed for corrupt activities and mismanagement, Prime Minister Ranil Wickremesinghe revealed yesterday.’

“These will include the Central Bank, the Bank of Ceylon, the People’s Bank, the Stock Exchange and the Insurance Corporation,” he told the Sunday Times.

Premier Wickremesinghe was commenting after the National Unity Government’s first weekly meeting of ministers discussed proposals, including one from him, to appoint Special Commissions to probe large scale corruption. The other is a proposal from Champika Ranawaka, Minister of Power and Energy. Ministers have agreed on an eleven member Council Against Corruption to evolve ways and means of tackling it.
Since assuming office, Premier Wickremesinghe is being flooded with information about key players in the former UPFA Government engaging in corrupt activity. Among them were top officials of the Presidential Secretariat, Ministers and officials.

Among the alleged irregularities at the Central Bank is how public relations companies in the United States were hired by the then Governor Ajith Nivard Cabraal without the approval of Cabinet. The Bank has also been funding demonstrations outside the UN office in Geneva and had met the expenditure when a Sri Lankan delegation travelled in a chartered aircraft to Trinidad and Tobago where they made an unsuccessful bid to host the Commonwealth Games in Hambantota.

The two major state-run banks – the Bank of Ceylon and the People’s Bank – have been accused of giving political nominees huge loans without collateral and the funnelling funds for political activities. In this regard, allegations against the People’s Bank, then headed by Gamini Senarath, Chief of Staff of the President, have come under close scrutiny.

A Government source said that at the Stock Exchange, one of the main areas of the investigation will be insider trading. It is alleged that a select mafia was responsible for this. The Insurance Corporation, the same source said, has come under scrutiny for a number of allegations including financial irregularities.
www.sundaytimes.lk

Sri Lanka 2014 vehicle registrations up despite fall in commercial vehicles

Sri Lanka’s vehicle registrations rose to 429,556 in 2014 from a year earlier picking up from lull in February but with commercial vehicles showing a drop, Motor Traffic Department data showed.

Motor car registrations were up 36.6 per cent to 38,780 units from 28,380 a year earlier, with hybrids continuing to lead while motor cycle sales were up. However three wheelers and many commercial vehicle categories were down.

More people were buying cars on finance and leasing arrangements with the share going up considerably, a senior department official said.

Three wheeler sales were down 5.3 per cent to 79,038 units in 2014 from 83, 673 a year earlier, though recovering from a slump of 5,148 in February.

Single cab sales were down14.1 per cent to 17.345 units in 2014 from 20,198 a year earlier. Mini trucks and heavy trucks as well as lorry sales were down last year compared to the previous year.

Motor cycle registrations were up 61.5 per cent to 272,885 last year from 169,280 in 2013. The financing share of motor cycles has also gone up last year, the official disclosed.
www.sundaytimes.lk

Six major probes at SEC were swept under the carpet

By Duruthu Edirimuni Chandrasekera

Some six probes involving large amounts of cash/share transactions were swept under the carpet without being ‘properly’ investigated by the Securities and Exchange Commission (SEC) after the departure of Thilak Karunaratne, former chairperson SEC.

According to reliable sources, these were serious investigations which showed blatant manipulation. “One was pumping and dumping of low valued hotel shares by a mafia don who is famous for insider dealing,” a source told the Business Times. He is allegedly tried to meet some powerful persons in the new Cabinet, seeking to pledge support to the new regime, according to the source.

“He was constantly seen with former President Mahinda Rajapaksa’s sons and allegedly had a strong hand in the resignation of Mr. Karunaratne and also his predecessor Indranee Sugathadasa.”

He along with his close mafia colleagues had brought in the new SEC chairman Nalaka Godahewa who is maintained a defiant stand, refusing to step down despite an order by the Sri Lankan Government, official sources told the Business Times.

“He finally quit on Friday after writing a farewell e-mail to SEC staff,” one official said. This the first time under President Maithripala Sirisena’s new administration where the head of a state agency has refused to quit after being ordered to.

On Wednesday night, Finance Minister Ravi Karunanayake told the Business Times that Godahewa had sent in his resignation on Tuesday, but the latter was quoted as telling some staff members that he hasn’t tendered his resignation because the SEC comes under the Ministry of Economic Development and not the Finance Ministry.

The SEC was placed under Prime Minister Ranil Wickremesinghe’s purview according to a list of subjects of ministries gazetted on Tuesday.

The source added that during 2012 there was a transaction where an alleged ‘mafia’ trader made some Rs. 500 million in 10 days, which wasn’t dealt with properly. “This was an individual who was close to a powerful brother of President Rajapaksa and ‘frequently’ dropped his connections to this person.” The Business Times reliably learns that he was summoned to the SEC during Ms Sugathadasa’s tenure to record statements relating to manipulations.

The source reiterated that these two mafia dealers along with their cronies who aided and abetted are trying to see that the probes won’t resurface. Also an insider at the SEC who was siding the mafia and successfully stopped these probes is visibly upset over the turn of events. “He ‘leaked’ the papers tabled at the investigation committee in mid 2012. He was interested in a top post, which he believed that the mafia with their close commotions could help him to secure,” he said.

One powerful trader was quoted in the media as saying, “We never expected to get business because of the political clout…… never used any connections. Never mixed professional duties with politics. We haven’t used any connections for business gain. There were no shortcuts to our success.” The IMF, Chamber of Commerce and Sri Lanka Institute of Directors have all said in the past that they were concerned by the events where two SEC chiefs resigned in less than a year, and have said a regulated market is very, very important, and that the resignations had sent a wrong signal to the international community.

Mr. Karunaratna when contacted said that, provided that he is appointed, he will do a thorough study of the SEC and ‘put the house in order’. “I am concerned about the volatility in the market. There might be manipulation now. All the black money seems to be exiting.”

He said that he plans to call a meeting with the Colombo Stock Exchange and draw up some measures to create stability. When asked if the probes will be reopened, he said that he will not be on a ‘witch-hunt’.

The Business Times also reliably learns that some SEC commissioners have already tendered their resignations.
www.sundaytimes.lk