The Sri Lanka Institute of Directors issuing a short statement regarding the disturbing developments at the Securities and Exchange Commission (SEC) warned that preventing the SEC from cleaning up the market would only lead to widespread indiscipline and a break down in law and order.
Last week, SEC Chairman Thilak Karunaratne resigned on principle, as did his predecessor Ms. Indrani Sugathadasa, as the government favoured to protect well-connected market offenders and their crony brokers who were being probed by the SEC for market offences.
"The Sri Lanka Institute of Directors (SLID) which has the furtherance of Corporate Governance as its foremost objective is perturbed by the recent, and ongoing, developments concerning the Securities and Exchange Commission (SEC)," the SLID said.
"The Institute believes that the independence of Regulatory Bodies is an important contributing factor towards entrenching confidence in a country’s capital market and economy. Therefore, any attempts to negatively interfere with the professionalism and independence of a Regulatory Body such as the SEC will only lead to widespread indiscipline and a break down in law and order and the resultant negative impact on the workings of the Capital Market.
"We urge the Governing Authorities to take the immediate necessary steps in redressing the current situation at the SEC and ensure that Regulatory Bodies are given the freedom to manage independently," the SLID statement said.
Last week, the Ceylon Chamber of Commerce too issued a statement that it was concerned about the manner in which the government was handling the entire issue.
It now becomes, obvious that well-connected high net-worth investors whose liabilities run into millions of rupees have with government support been successful in preventing the SEC from carrying out its investigations, which could have restored the credibility of the country’s capital market.