UNP Economic spokesman Dr. Harsha De Silva MP said the UNP had no confidence in the Securities and Exchange Commission (SEC) to conclude investigations into market malpractices that would result in litigations against offenders.
This comes close on the heels of recent revelations that Sri Lankan companies and individuals were operating offshore accounts in tax havens around the world, among them are investors in the stock exchange and a former public official.
Dr. De Silva said a recent report of the US Department of State had noted that Sri Lanka was blacklisted by the Financial Action Task Force in July 2011 for significant deficiencies in anti-money laundering legislation and practices.
"Are these being looks into by the SEC and Central Bank?" he asked.
"We have no confidence in the Dr. Nalaka Godahewa led SEC!," the trained economist told a press conference yesterday.
"Some of those who had manipulated the stock market, pumping and dumping stocks, have been appointed to exalted positions by the government. They are being rewarded for doing the wrong thing. The SEC will not investigate them. Some of them are operating offshore accounts in tax havens. Will the SEC investigate them? We have no confidence that they (SEC) would and we are disappointed with the Central Bank for not being thorough."
Earlier this week Dr. De Silva proposed a Parliamentary Select Committee be established to investigate these offshore accounts.
"We are not accusing anyone of wrong doing, but how can a former public servant open an offshore account in a tax haven and how come those manipulating the stock market operate such accounts? We need to investigate who and for what purpose these accounts were opened," he said.
"Environment Resources Investments PLC (ERI) is a rogue company. It was one of the first stocks to be manipulated in the market, its price was pushed up from Rs.10 to Rs. 260 on the guise that they owned a Platinum mine and they would make a lot of money. They issued warrants to unsuspecting investors who lost millions. The SEC slapped a puny Rs. 3 million each on three directors of the company. And now it seems a company called Lionheart, a major stakeholder of ERI, and its director Deleted Wickramasinghe, operate offshore accounts in a tax haven.
"Also, a former chairman of the CEB has an offshore account as well. Did this public official disclose this?"
"Tax havens are a problem not just for Sri Lanka. Earlier this week the G8 leaders said they would try everything to close down these havens and prevent dues that should come to their respective countries are protected," Dr. De Silva said.