U_N_P MP Dr. Harsha De Silva yesterday disgareed with Treasury Secretary Dr. P.B. Jayasundera’s assurance that new rules will be enforced to improve governance and prudence in stock market investments, urging the Government to first ensure existing laws are enforced.
On Thursday, Dr. Jayasundera in response to questions from media said audit and investment comittees will be set up for equity deals in addition to guideliens and good governance parametres.
Dr. De Silva during his media briefing yesterday however said bringing in new investment guidelines; particularly to the EPF, the largest state entity investing in the stock market is a redundant act.
“We do not need to bring in new rules and regulations but concentrate on finding why the existing rules and regulations have been violated. Who gave the authority to ignore the existing rules and regulations? That is what needs to be done,” Dr. De Silva said, adding, “Investment guidelines already exist, particularly in the case of EPF in an investment policy statement ‘Standard of Professional Conduct’ which had been last revised in December 2002.
This statement clearly states what the EPF can and cannot invest in. In it, it clearly prohibits investing in non blue chip companies and in companies that are making losses and are making negative net worth.”
He pointed out that in the 220.127.116.11 of the investment policy statement it clearly states that the EPF can invest only in blue chip companies. On the contrary, the MP said EPF has invested in secondary Diri Savi Board listed companies as well.
Commenting on Jayasundara’s remarks on bringing in new procedure to ensure that there is no interference in the decision making by state agencies in purchasing and selling equities in the market, De Silva said: “By saying that, he is admitting that all this time there has been interference, particularly in the EPF, the largest entity in the market and interference in transaction decisions on the CSE. Therefore I think he should immediately investigate to find out who these people are, why they interfered, why no action was taken on the people who were interfering and what the losses has been due to interference.”
He also added that the matter of EPF and stock market issues were first brought to notice in September 2010, few months in to his term. “Since then we have been consistent in pointing out the problems in the market. I have referred to this in the parliament over a dozen times. Until now, nobody paid any attention. Only when we caught the thief red-handed, loot in the trunk and they had nowhere to go with the stolen good did any effort was made in the regard.”
Following the NSB/TFC transaction and alleged fraud, Dr. De Silva also said that the Opposition will bring in another motion on issues dealing with state agencies investing in the stock market and the resulting alleged frauds taking place in the next Parliamentary session. Issues regarding Galadari, Green Elevators, Laughs Gas, The Finance Company and several others will be brought up in the next session.
Claiming that the NSB/TFC transactions was just the tip of the iceberg, he noted that the UNP has already started investigating into larger problems of fraud that is taking place in the Colombo Stock Exchange (CSE) and state agencies.