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Friday, 11 May 2012 00:01 - - {{hitsCtrl.values.hits}}
Prominent banking personality Rienzie T. Wijetilleke, who is best known as the former Head of the Hatton National Bank and for his 10-year stint as a Director of the Colombo Stock Exchange (CSE), of which he was Chairman for four, yesterday joined the growing chorus seeking justice in the controversial NSB-TFC deal.
Speaking to the Daily FT, Wijetilleke insisted that it was essential to consider the issue from a multi-dimensional aspect to understand the true harm the transaction had caused.
He stressed that given the magnitude of the offence, if he was in a responsible position, he would have sent several people home and “would have gotten others jail terms”.
Referring to the NSB Investment Committee, he said: “Firstly the Investment Committee should have assessed whether what they proposed was feasible and good for the organisation. Once they have decided this, they must go to the Board of Directors. That is the normal form. The Board of Directors will strictly go by the experts of the Investment Committee. This does not require physical meetings. In my bank it could have been done in an hour over the phone and other means. This procedure is necessary because everyone must remember that we are using public money for investment, but apparently this was not the case.”
He went on to emphasise that the monitoring unit of the stock exchange 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.”
Wijetilleke also faulted the settlement bank for paying the buyers before they received money from the NSB. “Nowhere in the world can the settlement bank pay the buyer before they get the money. They are flawed there. The settlement bank is totally responsible for settling this money before the transaction came through; they should be called on that.”
He highlighted that the monetary authority is the custodian of public deposits. “When I was heading HNB and constructing HNB Towers for Rs. 6 billion, the Director of Bank Supervision was very vigilant of whether we used public funds. The Central Bank used to send people every other day to check on us. That public obligation should have been lived up to by the Central Bank soon after the news came because the deal concerns public deposits.”
He added that higher brokering standards also needed to be implemented in the country. “Today you don’t get market brokers – you get market breakers.”
For Wijetilleke, the worst consequence is the battering an already-careworn CSE has had to face. “The saddest thing is now that the NSB has decided not to pay for the shares, this has given a critical message to the world about our stock market at a time when the market is struggling. For a public institution to say that they are not going to honour their commitment regarding a purchase is giving a very serious message about our country and our stock market as well as our credibility to financial markets, which I feel is the saddest thing from the public point of view.”
