Former Chairman of the Securities Exchange Commission (SEC) and State Minister of Urban Development, Coast Conservation, Waste Disposal and Community Cleanliness, Dr. Nalaka Godahewa lashed out at the Securities and Exchange Commission (SEC) and said that they were mainly responsible for the downfall of the Colombo Stock Exchange.
Dr. Godahewa told Daily News on the sidelines of Advocata’s Panel Discussion on: “The Future of Ports Development in Sri Lanka” at BMICH on Friday said that the Stock Market was catching up and moving up and ‘probably getting a little hot’ but the recent crash was due to unnecessary communications by the Colombo Stock Exchange (CSE).
“When you name companies and issue directives basically you are telling the people don’t buy. These are dangerous stocks. This is the last thing you should do. It was not very wise of them to have done that.”
He recalled that before he became the Chairman of SEC there were similar problems with SEC. “They never managed the sentiments of the market and kept on meddling with the market. Now it has begun crashing.”
According to Bloomberg statistics, within the first few weeks of Dr Godahewa’s appointment as SEC head in 2012 the market bounced back from the world’s worst-performing stock market status to the third best performing stock market status.
Authorities must understand that if they like it or not, markets are driven by sentiments anywhere in the world and this should be understood and be sensitive.”He said that he is not opposing investigations on companies. “But for ‘heavens sake’ investigate secretly and don’t advertise to the world because the market will crash. Also if there are any wrongdoings punish them.”
He said that he was with the SEC and knows that they have a very advanced surveillance scheme to detect any manipulations and based on that investigations could be carried out without bringing them to the public. He said that the authorities have now realized their mistakes and this is the reason for the market to settle. But they should not repeat these mistakes.”
He also said that the investors too should be wise not to be scared by these investigations.
In my opinion there may have been an hidden agenda to undermine the investor sentiment triggering market downfall. Will the subject Minister get to the root of this whole episode???