Reports on five SEC probes due in 2-3 weeks
Around five major cases of fraudulent deals of the Stock Market which
had taken place between 2010 and 2012 will be completed within the next
two to three weeks and the perpetrators brought to book, Chairman,
Securities and Exchange Commission of Sri Lanka (SEC), Thilak
Karunaratne told Sunday Observer Business.
He said that the nature of the prosecution, whether criminal charges
or penalties will be decided on by the Commission in keeping with the
provisions of the SEC Act.
The Securities and Exchange Commission of Sri Lanka, the regulator of
the Colombo Stock Exchange (CSE) was set up in pursuance of the
Securities and Exchange Commission of Sri Lanka Act, No. 36 of 1987.
Karunaratne said that the Commission conducted a systematic and
comprehensive investigation and that it did not want to rush through
leaving loopholes for the culprits to get away.“We have carried out a
thorough investigation. The fraudsters will be exposed soon,” he
said.Stock Market analysts and financial experts have been critical of
the operation of the Stock Exchange particularly in the past and have
questioned the delay to take the culprits to task. Karunaratne said that
the SEC Act which had been amended on a few occasions contains
shortcomings and that a new Act will be fast-tracked. The final draft
will be ready within the next three months.
“Sri Lanka should emulate Malaysia, Thailand and Philippines as
models with vibrant financial market jurisdictions. We need a strong
jurisdiction for market regulation,” the SEC Chairman said.
There had been several instances of market manipulation, such as pump
and dump and insider dealings at the Colombo Stock Exchange in the past.
Further details of the transactions were not made available.
Addressing the corporate directors award ceremony conducted by the
Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and the
Securities and Exchange Commission of Sri Lanka last week, Karunaratne
said that the 27-year-old Act will be replaced with a new Act with more
jurisdiction for the regulator. The vision of SEC is to be the benchmark
regulator in South Asia for effective, efficient and proactive capital
“President Maithripala Sirisena and Indian Prime Minister Narendra
Modi are examples of good governance. There cannot be good governance
unless the ideology cascades to all segments of the economy. Effective
corporate governance is not merely compliance with regulations but being
accountable through corporate social responsibility,” Karunaratne said.
He said transparency, credibility and risk management are the
cornerstones of good governance.