Upset media unfairly identified him with stock exchange mafia
* Thilak should have stayed and fought mafia
*Says he had nothing to do with resignation of SEC Chairman
* Never used personal relationships to exert pressure on SEC
* Defence Secretary only fixed appointment with SEC Chairman
* SEC & economy drove down bourse
* Anti-government labelling wrong
Controversial critic of the Securities and Exchange Commission (SEC), Dilith Jayaweera said yesterday that the regulator needed to take timely and effective measures against market offenders, sending those guilty to jail if and when proved guilty.
"We need a regulator that acts and not talk. We need a regulator with a backbone. If there are 17 cases being investigated, conclude the investigations and send them to jail, don’t just talk about it," Jayaweera told journalists yesterday, adding that he was upset the media had unfairly identified him with the stock exchange mafia, as a result an Indian investor had pulled out from a recent meeting after doing a check on Jayaweera and his companies on google!
He was grilled by the media for almost three hours after he invited them for a briefing at the Cinnamon Grand Hotel, Colombo, in a bid to clear his name and safeguard the reputations of his companies, while at the same time explain his stance in the sordid affair that had compromised the entire system.
He said he was not a high net worth investor although prices were brought through his company Divasa Equity with bank facilities. "I never personally traded in the stock exchange."
The Treasury and Central Bank have both said the recent slump in share prices was a market correction. But Jayaweera contended that this was an unusual correction.
"The SEC does not need more teeth. The existing laws are ample enough for it to clamp down on market offences. What is lacking is efficient and timely implementation of the law," he said.
SEC Chairman Thilak Karunaratne last week resigned from the post sighting pressures brought upon by an influential group of investors and their crony brokers, with the government not doing enough to support the SEC which was in the process of completing 17 investigations into market offences.
Less than a year ago, Ms. Indrani Sugathadasa also resigned from the same post on a matter of principle for the same reason after the then Director General of the SEC Malik Cader was removed from the SEC after implementing a slew of policy measures to cool off an overheated stock exchange and commencing investigations into market offences.
The Parliamentary Committee on Public Enterprises Chairman DEW Gunesekera has said there was reason to believe a mafia was operating in the stock exchange and the SEC Act must be amended as a matter of priority to give the regulator more teeth to deal with market offenders.
Jayaweera had given a presentation at a recent meeting of capital market stakeholders with President Mahinda Rajapaksa, blaming the SEC for the bourse’s slump. He said the SEC and the media had behaved in an anti-government manner in that terms such as pumping-and-dumping, insider dealing and overvalued stocks were used too loosely and out of context. However, when asked whether people in a democracy did not have the right to dissent, he said no! Labelling those with another point of view as being anti-government was wrong he said.
Jayaweera said the regulator’s ad-hoc policy measures had caused the market to fall, but this was not the only reason. Macroeconomic conditions such as high interest rates and prevailing sentiments in the economy also contributed to the downfall of the bourse, he said. When asked whether he was being anti-government for making such a statement, he said, "Absolutely Not!"
"Both Ms. Sugathadasa and Thilak Karunaratne are capable people of integrity and they should not have resigned. I was very sad to see them resign. I did not have anything to do with Thilak’s resignation," Jayaweera said.
The press repeatedly pointed out that an influential group seemed to have managed to impede the SEC’s efforts in concluding the investigations. But Jayaweera believed there was no mafia in the stock exchange influential enough to move the President, because the President "cannot be influenced in such a manner."
"If there is, then we are all in trouble, the whole country is in trouble. Thilak Karunaratne should name them," he charged. "Thilak had the duty to stay on and fight!"
As to policy directives such as the credit restrictions and price bands, Jayaweera said they were detrimental to the market ( See front page story in yesterday’s issue) but conceded it was a personal opinion and that contrary views should be respected.
Jayaweera himself has been served four or five show-cause letters regarding transactions dating back to two years ago by the SEC and he claimed that he did not use personal connections to influence the SEC.
"I only asked Defence Secretary Deleted Rajapaksa if he knew Thilak Karunaratne and they happened to be close friends. I asked him to make an appointment for me which he did then and there. I visited Thilak and we had cordial discussions. The investigations never came up. In fact we had a lot of hope in Thilak, someone I greatly respect. I thought he would be around for five years or so and take the stock exchange to the next level," Jayaweera said.
Jayaweera praised Ms. Sugathadasa and Karunaratne several times, and at one point charged that the officials in the SEC had misled the two chairpersons.
When pressed to comment on external pressures leading to their resignations, Jayaweera finally conceded, "There is a problem in the system and not individuals, saying they are weak or anti-government or a mafia is not going to help. All stake holders should come together to fix the problem."