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Thursday Nov 14, 2024
Tuesday, 19 January 2021 01:52 - - {{hitsCtrl.values.hits}}
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Eran Wickramaratne
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Samagi Jana Balawegaya (SJB) Parliamentarian and former State Minister of Finance Eran Wickramaratne yesterday called on share market investors to proceed with caution, warning of potential ‘pump and dump’ schemes.
Wickramaratne addressing reporters at the Opposition Leader’s office recalled that, following a recommendation by the Presidential Commission of Inquiry (PCoI) on the bond scam, the Central Bank had carried out five forensic audit reports. One such report investigated the transactions made by the Employees Provident Fund (EPF) over several years, the findings of which Wickramaratne alleged indicated there were irregular transactions being conducted involving EPF funds as well as other stocks.
“One of the issues that was investigated was pumping and dumping in the years between 2011 and 2013, during the earlier Rajapaksa regime. The people responsible manipulated the market.
The report very clearly narrates the manipulation that went on during the period when Mahinda Rajapaksa was the Minister of Finance.”
Quoting from parts of the forensic audit, Wickramaratne alleged the losses incurred by the EPF in equity investments were specifically highlighted for listed and unlisted investments from the year 2011 to 2015. He said the EPF had invested a sum of Rs. 500 million in shares of SriLankan Airlines in July 2010 but there had been no revenue since the investment.
He added that the EPF had invested millions of rupees in multiple unlisted companies in the areas of power generation, hotels, finance companies, with the EPF not receiving any income in the form of dividends from these investments till 2016.
“When we hear the message of the share market, we need to not only look at the message, but the messenger as well. We hear a lot of comments about the economy, lots of nice stories and fairy tales are being told, people are being fooled, basically focusing on the stock market.”
The former State Minister charged that key people who had been cited in the forensic report were holding responsible positions in the present Government and were closely linked to the share market. Wickramaratne also pointed out that Sri Lanka’s share market has been through boom and bust cycles before and this could be the case once again. He therefore appealed to investors, particularly new entrants to the Colombo Stock Exchange, to be cautious of their investments and to do their due diligence before making investment decisions.
“Since 2019 foreign investors have been gradually withdrawing from our share market, which is an indication of weak fundamentals. Local retail investors must therefore be cautious of their investment decisions.”
