Rienzie reiterates blame despite CSE denial

Monday, 14 May 2012 00:00 - - {{hitsCtrl.values.hits}}

Former Chairman and veteran banker Rienzie T. Wijetilleke yesterday reiterated his position that the Colombo Stock Exchange by its inaction and non-intervention in a timely manner over the NSB-TFC deal had failed in its moral and ethical obligations.

He re-emphasised that the CSE failure had caused immense damage to the market’s credibility and reputation.

“The public will be watching with much interest the outcome of their belated investigations,” Wijetilleke told the Daily FT in a rejoinder to the CSE’s original response denying all allegations cast by the former Chairman on the NSB-TFC deal published in Daily FT on Friday.

The CSE in its response said share transactions are carried out by licensed stock broker firms based on the determinations of buyers and sellers. In this regard, the role of the CSE is to ensure that these transactions are executed on the Automated Trading System (ATS) of the CSE in conformity with the applicable rules.

The ‘order matching’ takes place in a completely automated environment and hence, the CSE cannot intervene in the execution of a particular transaction. In the circumstances, the CSE could not have “suspended the transaction” in question, as claimed by Rienzie Wijetilleke.

Further, the CSE does not “approve” transactions carried out on the ATS of the CSE, as erroneously stated by Rienzie Wijetilleke.

Furthermore, the Central Depository Systems (Pvt.) Ltd. (CDS), a fully-owned subsidiary of the CSE, has suspended NSB from carrying out any CDS functions as a CDS Participant with effect from 8 May 2012.

Whilst denying all allegations made against the CSE in the captioned article, the CSE assures the public that, in the event of any violation of the CSE/CDS rules, necessary action has been/will be taken by the CSE, as deemed appropriate.

In its original statement, Wijetilleke alleged that the monitoring unit of the CSE should have acted swiftly to suspend the transaction. “During market operational time, there are two people expected to look at every transaction that takes place on the screen, especially big transactions. The deals have to be monitored and a button pressed to approve the transaction. When the NSB transaction came through, in my view the person who saw this transaction should have taken this information up to the top CSE people and notified them. The CSE has every authority to suspend the sale for 12 to 24 hours; this is actually done very often. That should have been done. So there they were flawed,” added Wijetilleke.

It was these references which the CSE later denied, but the former Chairman, as confirmed by his statement yesterday, appears unfazed and emphatic.