Why ex regulators should stay away from pvt. banks: A response to Vithanage

Monday, 14 July 2014 01:42 - - {{hitsCtrl.values.hits}}

This has reference to my letter and the spontaneous Reply of Mr. Vithanege in the Daily FT on Friday. I agree with Mr. Vithanege that Mr. Cabral and Dr. Jayasundara have done a lot of good for the economy and the country in general. The economic fundamentals are the strongest in 10 years, all credit to the duo. My issue is about governance. How can you say it is right to appoint the Governor’s sister, brothers-in-law, nieces and cousins as chairman and bank directors? Six and counting, a record! Is it correct to appoint ex regulators like Dr. Jayamaha and Mr. Dhreeasinghe to bank boards they have regulated before? Why were upright top central bankers like Dr. Wijewardane and Dr. Bandaranayake ignored previously? My other complaint was, take the Commercial Bank, the Board has a member who was convicted for stealing timber and then pardoned. He is still on the board; the next possible Chairman Dheerasinghe’s wife is accused of leading the EPF when the fund incurred a loss of over 12 billion, in pump up deals in 2011. She is now an Assistant Governor. What regulation can we expect from the Central Bank and when the EPF owns over 10% of Commercial bank and Dheerasinghe’s wife is an Assistant Governor. Dheerasinghe cannot be considered an independent Director with all the conflicts and controversy surrounding him. He should be disqualified by the SEC. All these crazy things happen because the private sector no longer has strong business leaders like D.S. Jayasundara, Upali Wjewardane and A.G. Hinniappuhami who can stand up to people like Cabraal and Dr. Jayasundara and tell them when they are wrong. Can Mr. Vithange please tell me if appointing relatives to bank boards and ex-regulators is a good practice please? I am also surprised a public service veteran like Dr. Jayasundara cannot understand the consequence of these actions, being the ultimate guardian of the financial sector. The reason why I said President Rajapakse would have to pay for these sins is because during elections politicians become accountable for the actions of their top bureaucrats and the EPF and the Commercial Banks affect the lives of millions of Sri Lankans. Priyantha