Sri Lanka’s Securities & Exchange Commission (SEC) has requested the Attorney General (AG)’s Department to expedite the investigation pertaining to the controversial TFC-NSB transaction involving Pradeepa Kariyawasam, a former bank chairman and husband of former Chief Justice Shirani Bandaranayake.
Amidst allegations swirling in the marketplace that SEC Director General Hareendra Disa Bandara’s resignation, effective May 27, was connected to a possible cover-up in the case, the SEC said on Friday that the AG is handling the issue after a probe report was given some months ago.
“We followed up a request from the last COPE (Committee on Parliamentary Enterprises) meeting that the SEC should write to the AG to expedite this investigation. This letter was sent last week (2-3 days after the COPE meeting on March 19),” SEC Chairman Nalaka Godahewa told the Business Times. In the meantime, the post of Director General of the SEC was advertised in the newspapers yesterday.
Mr Kariyawasam was forced to resign after the SEC cancelled a deal in which the NSB (National Savings Bank) had purchased a sizable stake in TFC (The Finance Co.) at an inflated price. The investigation is pending.
Initially dilly-dallying in taking action against Mr Kariyawasam despite a complaint of corruption against him, anti-bribery authorities probe after the former chief justice fell out of favour with the Government and was successfully impeached by parliament.
Asked about the status of the TSB-NSB deal, Dr Godahewa said, “The SEC inquiry into this transaction had been completed and sent to the AG for action even before I joined the SEC last September. Subsequently there were some consultations with the AG on this issue.”
Last Thursday, Dr. Disa Bandara submitted a letter to the Commission saying he intended to resign with effect from May 27 and told reporters that this was over reasons of principles and issues. At the weekend, he clarified his comments, saying in a statement that many probes had been completed. No reference was made about ‘issues’ at the SEC.
Dr. Godahewa said however that the DG’s contract ends on May 31 and at a meeting of the Commissioners on Tuesday, at which the DG was present, it was agreed that pursuant to the DG’s contract ending, the post would be advertised. “Therefore I can’t understand why he should resign a few days before his contract ends. Generally if there is an issue, that individual would quit immediately, which was not the case here,” he said.
The DG sent in his resignation on Thursday, 2-3 days after the SEC Commissioners’ and the COPE meetings.
The SEC chief declined to comment on COPE proceedings. According to reports, COPE had asked the SEC to speed up the probes which had been held up owing to amendments to the SEC Act being studied by the AG.
Stock market insiders allege that there is an attempt to scuttle the TFC-NSB case as the former NSB chairman is believed to have named some influential government supporters as also being responsible for the decision to buy the TFC stake.
Dr. Disa Bandara’s intended resignation follows the ‘forced’ departure of former SEC chairpersons Indranee Sugathadasa and Thilak Karunaratne and some other officials after a crackdown on market manipulation.
This is the third time the post of DG is being advertised in the past year. Although a suitable candidate was found in the first call for applications and he was informed of his intended appointment, the decision was withdrawn at the last minute.