Opinions were mixed on the results of Friday’s meeting between President Mahinda Rajapaksa, representatives of the SEC and CSE, investor interests including business leader Harry Jayawardena and former Aitken Spence Chairman C.P. de Silva, high profile investors Nimal Perera and Dilith Jayaweera, CEOs of stockbroking companies and senior officials.
Mr. Sriyan Gurusinghe, President of the Colombo Brokers Association said that it was wrong to label the event as a ``no results meeting’’. On the contrary it was ``very productive’’ with all stakeholders present, he said.
Areas covered included issues such as over-regulation, though some participants urged that tight regulation was essential, alleged malpractices, broker credit rules etc.
Mr. Dilith Jayaweera of Triad Advertising and Derana Television who has invested substantially in a number of new companies and has been a major trader of the CSE made a power point presentation to urge the case against over-regulation as well as various ad hoc regulations imposed by the SEC.
``It was an effective presentation,’’ one source said requesting anonymity. He showed with graphs, news clips and other material how the market reacted to various regulatory restrictions.’’
Another participant dubbed Jayaweera as ``part of the Mafia’’ targeting the SEC and said that it was clear that the main intention of this group, with access to the highest levels of government, was to get rid of the SEC Chairman and Director General.
Mr. C.P. de Silva who described himself as a former Chairman of the SEC made the point that what is important in any market is perception and the perception was that the Colombo stock market was riddled with corruption.
He noted that while in the US people are sent to jail for 10 and 12 years for crimes related to stock trading, here in Sri Lanka nobody has been sent to jail even for a week.
De Silva made the further point that that today it was possible for an investor to earn risk free returns of 15 to 17 percent while the dividend yield in most quoted shares fell far below that. In that context, he complimented President Rajapaksa for imposing a ``deemed dividend tax’’ some years back.
The President made clear that issues relating to the stock market should be sorted out with Dr. P.B. Jayasundera, Secretary to the Treasury and Secretary to the Ministry of Finance and Planning rather than with himself.
He made the point that the stock market was an important economic activity and its revival and expansion rated the highest priority. This was an instrument through which the people can benefit from the country’s economic growth.
SEC Chairman Thilak Karunaratne made a spirited defence of the commission’s regulatory role and Mr. Krishan Balendra, Chairman of the Colombo Stock Exchange made some observations on matters relating to the CSE.
Mr. K.C. Vignarajah, a substantial shareholder in many companies and a shareholder activist, was among the speakers defending the regulator.
The Colombo Stock Brokers Association has made some proposals to assist the revival of the market and a copy of that document presented to the SEC and the CSE was also tabled at the meeting.
Senior officials who attended included Mr. Lalith Weeratunga, Secretary to the President, Dr. Jayasundera and Mr. Sajin Vas Gunawardene, MP.