SEC Chief scoffs at critics

By Azhar Razak

The Chairman of the Securities and Exchange Commission of Sri Lanka (SEC), Dr. Nalaka Godahewa said that he had been singled out over allegations of ‘conflict of interest’ following his appointment as SEC Chairman. Pointing out that according to the SEC Act, the Chairman of the SEC should only be a private sector professional, he questioned how one can find that specific private sector professional who had no contacts with the business community and at the same time who is suitable to head the SEC.

“Before me there had been 12 Chairpersons at the SEC and except one of the recent appointees who was a retired public servant, everybody else had been prominent business people who held chairmanships/directorships in several listed and unlisted companies. Then, why are some people talking about conflict of interest only in my case?” he inquired responding to the allegation posed in an exclusive interview published in The Nation’s GAIN section.
He noted that it is because of this paradox of the SEC Act requiring a private sector person to head SEC and the difficulty of finding someone with no other existing portfolios or contacts there are clear cut provisions in the Act addressing how to handle situations of conflict of interest.
“It is only those people who cannot understand these basic guidelines of governance who are trying to make an issue out of nothing,” he charged.

Ever since Dr. Godahewa’s appointment as the head of SEC, there has been a growing debate whether his appointment has led to a ‘conflict of interest’ with other roles he plays in some listed firms and his close association with powerful investors. In particular, Dr. Godahewa still holds the Chairmanship of listed company, Colombo Land and Development Company (CLND) although he resigned from George Steurt Finance Plc, earlier known as Divasa Finance Ltd just days before his appointment. Meanwhile, responding to whether there is another case of ‘conflict of interest’, where CLND has plans to build hotels and the fact that Dr Godahewa holds office as the Chairman of Sri Lanka Tourism Development Authority (SLTDA), he explained that the ‘conflict of interest’ scenario will only arise in the future as even the land for the proposed hotel has not been purchased yet and that in any case he intends to resign from SLTDA before the land is acquired.

“This argument was first put forward by a business editor of a weekly newspaper. I feel this journalist has watched the Hollywood movie ”Minority report” of Steven Spielberg where according to the law in 2054 future intentions can be punished by law. However, to my knowledge, the current law does not allow anyone to be punished for a future intention,” he said.

Clarifying further he said that according to the Sri Lanka Tourism Act, the Chairman of SLTDA cannot be a director of a business that operates or provides tourism services of any class or description.

“What this refers to is a tourism service that has been gazetted. Also, for any institute to be recognized as a provider of tourism service, that institute must be registered with SLTDA. However, this journalist had forgotten the fact that Colombo Land does not provide any tourism services currently. What has been disclosed by the company to the Colombo Stock Exchange is that it intends to purchase a land for the purpose of building a hotel in future. The land is not even purchased yet. So obviously there is no hotel constructed. The company may even decide to build something else on the land once purchased. In any case I intend to resign from SLTDA before any of these take place. So this conflict situation that you have questioned is never going to arise,” he further pointed out.

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