There is market speculation that over Rs. 6 billion of funds at the Entrust Securities PLC has been unaccounted for.
Sources say that this amount has been increasing and no action had been taken on it.
Questions are being asked as to why no action was taken previously by authorities even after the then Chairman, Chanuka Ratwatte resigned from the company last October.
After studying the issue, the Central Bank requested a restructuring proposal from the company in November and when this was not forthcoming, it was taken over. Subsequently the management was given over to National Savings Bank to manage.
"We are taking over the company to protect the government securities market," said Governor Arjuna Mahendran at a recent media conference.
This is the first time that a Primary Dealer is being acquired by the government.
Formerly known as Ceylinco Shriram, this company crashed in 2009 during the Ceylinco group financial controversy. Subsequently Chanuka Ratwatte, a former Securities Exchange Commission Director along with a consortium took over the management. Later Entrust Securities created history in the local debt market by being the first regulated Non Banking entity under the Public Debt Department of CBSL that got listed in the Colombo bourse.
A source from the Central Bank said that they have handed over the investigations to the Criminal Investigations Department and justice will be done to those affected.
"This is a primary dealer and we want to find out who used this money and for what,"a senior official said.
Many dealers have praised the Central Bank in the manner in which this transformation was done with out creating panic in the market and trading going on uninterrupted.
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Sources say that this amount has been increasing and no action had been taken on it.
Questions are being asked as to why no action was taken previously by authorities even after the then Chairman, Chanuka Ratwatte resigned from the company last October.
After studying the issue, the Central Bank requested a restructuring proposal from the company in November and when this was not forthcoming, it was taken over. Subsequently the management was given over to National Savings Bank to manage.
"We are taking over the company to protect the government securities market," said Governor Arjuna Mahendran at a recent media conference.
This is the first time that a Primary Dealer is being acquired by the government.
Formerly known as Ceylinco Shriram, this company crashed in 2009 during the Ceylinco group financial controversy. Subsequently Chanuka Ratwatte, a former Securities Exchange Commission Director along with a consortium took over the management. Later Entrust Securities created history in the local debt market by being the first regulated Non Banking entity under the Public Debt Department of CBSL that got listed in the Colombo bourse.
A source from the Central Bank said that they have handed over the investigations to the Criminal Investigations Department and justice will be done to those affected.
"This is a primary dealer and we want to find out who used this money and for what,"a senior official said.
Many dealers have praised the Central Bank in the manner in which this transformation was done with out creating panic in the market and trading going on uninterrupted.
www.dailymirror.lk
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