“ECCSL hosts panel discussion on ‘Capital Markets – Integrity & Development’ ”
On Thursday 1st November 2012, The European Chamber of Commerce of Sri Lanka (ECCSL) hosted a panel discussion entitled ‘Capital Markets – Integrity & Development’ exactly a week after the hugely successful Responsible Tourism Forum.
The panel discussion provided a rare opportunity for industry stakeholders to meet and share their perspectives and industry knowledge of Sri Lanka‟s markets, and to engage in healthy debate on the equity market‟s current status, challenges and future.
Guest speakers included Dr. Batagoda (Deputy Secretary to the Treasury – Ministry of Finance and Planning), Dr. Harsha de Silva (Member of Parliament), Mr. Sunil Handuneththi (Member of Parliament), Dr. Dilesh Jayanntha (Independent Economic Advisor to the ECCSL), Mr. K.C. Vignarajah (Spokesperson for Independent Shareholders Association of Sri Lanka) and Mr. Sujeewa Rajapakse (President of the Chartered Institute of Accountants of Sri Lanka).
ECCSL President Dilipan Tyagarajah welcomed the event and thanked both Chamber members and many new faces for braving the “less-than-tropical weather conditions” and attending the event, held at Galle Face Hotel‟s Palm Lounge.
Dr. Dilesh Jayanntha was the first to take to the podium. He advised investors to think long-term and to carefully consider potential investment companies very carefully. “Policies should be in line with national interest”, he cautioned, adding that, “if it’s something that’s pursuing anti-social activities you can be sure the government at some stage will take steps against you.” Dr. Jayanntha continued, “if you’re a minority shareholder, ensure your funds are not siphoned off by controlling interests.”
Dr. Harsha de Silva then spoke passionately and eloquently on the „Importance of an Independent Regulator‟. “Markets are supposed to work well, markets are supposed to be efficient,” he explained, adding that this isn‟t always the case.
According to Dr. de Silva, “When the regulator loses its independence, it’s the failure of the government.” He added that this was a technical point, not a political point.
Dr. de Silva continued, explaining that the regulator needs to be regulated by the industry (regulatory capture). However, he highlighted the problems that occur when a “special interest group within the industry” capture the regulator and begins regulating the way it wants.
The third panellist, Dr. Batagoda, presented on „Government Policy on the Equity Market‟ and spoke of the need to invest 30-35% GDP in order to both maintain and increase growth, to increase the current 6% of GDP that is currently being invested by the government. The gap, he suggested, should be filled by the private sector, including promoting Foreign Direct Investment. He then added that the market needed to inform the government of what needs to be done to assist with this.
Interestingly Dr. Batagoda reminded participants that 80% of the industry is made up of SMEs and there is a need to encourage the growth so as to achieve overall growth of the economy.
“ECCSL host panel discussion on Capital Markets – Integrity & Development” PRESS ALERT
Mr. Sunil Handuneththi took a slightly different
approach as the fourth panellist, speaking on behalf
of the wider population on „The role of the people in
safeguarding their stock market investments‟. Like
Dr. de Silva, he spoke passionately, his grassroots
campaign background showing through. “Why are
people not protesting and demanding their rights?”
he questioned, before continuing: “Every member
must have a right to know about their investment.
They must know… they have a right.”
Mr. K.C. Vignarajah encouraged people to
participate in enterprise and highlighted that the
“essence of good corporate governance is that
there are good checks and balance” and a code of
conduct that is adhered to. He stated that in reality,
there are only a few errant directors and companies
that do not follow good governance practices,
implying that most companies do consider social
integrity in their work methods.
In response to the accusations by some in the
industry that the market is known as a „mafia‟, a
number of stockbrokers present expressed their
views that this term is detrimental to the industry as
a whole. “This term is not very appropriate”, stated
Eardley Kern, Head of Sales and Marketing at
Lanka Securities (PVT) Limited, who has 22 years‟
experience in the Colombo Stock Exchange. He
added that the “market operates on fundamental
perception and confidence… fundamentals haven‟t
changed, it‟s improving. But the perceptions and the
confidence has been deteriorated by people who
have held positions at the highest office making
While many different perceptions were raised during
the discussions, effective solutions to resolve the
issues at hand must be approached in a
collaborative and holistic manner. This includes
proper enforcement of regulatory measures and
encouraging transparency. In line with the national
strategy, higher numbers of participants in local
capital markets and much-needed foreign portfolio
investments should be promoted. This should be
combined with an increased awareness of the need
for safe investments, garnered through effective
The discussion raised a number of interesting
points, which will be built upon in a working paper to
be published by the ECCSL later in the year. For
further information on this, to request a recording of
the event, or information on how to become a
member of the Chamber please join our Facebook
page or contact the ECCSL on