Ravi K rakes up insider trading at CSE

Monday, 25 November 2013 00:45 - - {{hitsCtrl.values.hits}}

By Ashwin Hemmathagama Our Lobby Correspondent Opposition MP Ravi Karunanayake revealed details of insider trading and market manipulations in Parliament last Saturday, and pointed to the Government’s inability to establish investor confidence at the Colombo Stock Exchange and punish a “handful of unscrupulous rogues”. Karunanayake said that two former chief regulators of the stock market had resigned in protest over the scandalous state of the Colombo Stock Exchange.

“Former Securities and Exchange Commission heads, Indrani Sugathadasa and Thilak Karunarathne, exposed these illegal operations. These scams must stop for the sake of this country,” he asserted. Karunanayake alleged high net worth investors Dilith Jayaweera and Ajith Devasurendra were both engaged in the pump-and-dump concept at the stock exchange. “They put the sustainability of the stock exchange at risk. Why are these people allowed to continue like this?” he said. According to the UNP MP, innocent retail investors lack the confidence to invest because of a handful of unscrupulous individuals. Raising a series of supplementary questions, Karunanayake pointed to how the assets of Ceylinco Company were stripped and handed out to friends of top Central Bank officials. “Ajith Devasurendra was involved in the NSB deal that tainted the Government,” said Karunanayake said. In response, Minister of International Monetary Co-operation and Deputy Minister of Finance and Planning Dr. Sarath Amunugama asked Karunanayake to hand over any evidence that he had against Jayaweera and Devasurendra, allowing the SEC to take action. According to Amunugama, 67 investigations have been conducted from the inception in relation to insider dealings at Colombo Stock Exchange. Apart from these, the Minister tabled details of 61 pump-and-dump style market manipulations at CSE. “During the five-year period January 2008 till December 2012, the surveillance, investigations and enforcement division of the SEC has found 182 irregular transactions conducted on shares of listed companies. Investigation of 38 such activities have been concluded. There are 10 such incidents found during the 11-month period from January 2013. Investigations have been concluded over two incidents,” said Minister Dr. Amunugama, who said that the prevailing legal framework in Sri Lanka was adequate to net the culprits.