Penalty for money laundering not enough

by Nilma DOLE

“After the dawn of peace, Sri Lanka recorded an unprecedented rise in the stock market which shot up to 7, 800 points in 2009”, Tilak Karunaratne told the International Chamber of Commerce AGM recently. He said that if Sri Lanka wants to maintain and post a high stock market percentage, the right regulations need to be in place. “Investors need to be advised on Sri Lanka's business environment and the balance of payments situation needs to be addressed. In addition, there is a need for changes to be made to the SEC Act to create an optimum atmosphere,” he said. Moreover, a proper legal system has to bring wrongdoers to justice.

“The problem is that wrongdoers in Sri Lanka are asked to pay a penalty four million rupees which is nothing for a money launderer.

This means that even though they are in the wrong, they pay the penalty and got away scot-free and this doesn't set a good example for good financial ethics,” he said.He also said that a proper risk management system should be in place to help sustain the climate in Sri Lanka.

“We are trying to create a proper Risk Management System to be operational by 2013,” said Karunaratne.

It was also highlighted that a sustainable environment should be the key in developing a free share market but also that would give benefits to all stakeholders.

“IPO trading is the most important thing and if it is done in a legal and systematic manner, then Sri Lanka can shine in key markets. According to Karunaratne, Sri Lanka's blue chip companies do not declare high dividends and they tend to keep the excess in reserves. “A suitable system should be in place for accountability”, he said.