“(Former SEC Chairperson) Mrs. (Indrani) Sugathadasa and her team fulfilled this role. Indeed, under her resolute leadership, the SEC was about to institute action against wrongdoers.
This was especially necessary as the SEC had made an extraordinary attempt to attract small and rural investors; a noble effort to ensure that the benefits of the post war economic boom percolated to the masses. The SEC rightly felt that it was its duty to protect the honest public investors and to curb the activities of the insider traders, market manipulators and corporate looters. In taking action against such wrongdoers it was only performing its statutory duties,” the trio - K.C. Vignarajah (former chairman of the Ceylon National Chamber of Industries), Dr. Dilesh Jayanntha and Tissa Seneviratne – said in a letter to the Treasury Secretary on Tuesday, urging that Ms Sugathadasa be re-instated in a position she had quit in disgust.
Their efforts however failed, for, two days later (Thursday), former parliamentarian and businessman Tilak Karunaratne assumed office as the new chairperson, on being appointed by President Mahinda Rajapaksa. They had urged Treasury Secretary Dr. P.B. Jayasundera not to accept her resignation saying she is a ‘public servant of unimpeachable integrity and dedication’ and only doing her duty – by going after the wrongdoers.
Ms Sugathadasa resigned last week after a failed battle with a group of powerful brokers and influential investors, dismayed by her efforts to probe insider trading. The market was also pressuring the SEC to lift tough, restrictive credit rules.
The investors, among whom Mr Vignarajah is well-known for fighting for the rights of investors and supporting efforts by the regulator to punish insider traders and manipulators, said Ms Sugathadasa had sought to fulfill her duties conscientiously, in the interests of savers, investors, the general public and the nation at large. “It appears that certain selfish crooked groups tried to undercut her, the Commissioners and the efficient (former) Director-General,” they said.
Malik Cader, SEC Director-General was eased out from his position and transferred to the Finance Ministry as a consultant. The letter said the equity market in Sri Lanka now has investments not only of traders (including big short term speculators), but more importantly long term investors, big and small, and a large section of the productive work force (through the EPF and ETF). These latter investments represent the life savings of many poorer segments of the beloved country, which will count on these funds for their existence after retirement.
It is the sacrosanct duty of the government to ensure that these funds are protected through proper regulation of the capital market, the letter said. They said Mrs. Sugathadasa, Mr. Cader and the team were also spearheading efforts to create a decent ‘public float’ of at least 30%, (still less than in many other developing countries, which average about 45%). They were also conscious of the evils of delisting- a fraud perpetrated on the innocent investing public.
The letter said Ms. Sugathadasa’s resignation and Mr. Cader’s transfer are major blows to the image of Sri Lanka’s capital market here and abroad. They also pointed out that Sections 50A and 51 of the SEC Act deal with persons who threaten, intimidate, defame or obstruct members, officers and servants of the Commission in the performance of their duties. Penalties range from terms of imprisonment of either description to fines or both. “It is well known that insider traders, market manipulators and corporate looters made direct and veiled threats against Commission members, officials and honest activists protecting the good name of the market. It is important that every decent public official stands up for their duty conscious colleagues and obtains deterrent punishment for those who attempt to threaten them,” the trio urged.