Chandra Jayaratne writes to SEC on EPF receiving Rs. 231 m over share transaction

Good governance activist Chandra Jayaratne has written the following letter to SEC Chairman Faizal Salieh over the EPF receiving Rs. 231 million on account of alleged manipulation and loss of value on transaction of shares of LAUGFS Gas PLC, with copies to President, Minister of Finance, Minister of Justice, Minister of Internal Security, IMF Diagnostics Unit, Ceylon Chamber of Commerce, Institute of Chartered Accountants, and Media for Public Knowledge

This note begins with an expression of the highest recognition of the professionalism, courage to be different, and for transparent upholding of the rule of law, as pursued by the Securities and Exchange Commission (SEC) in the above connection. It is an example worthy of noting and emulation by other independent institutions, regulatory authorities, and independent law enforcement authorities. 

As noted in the media publication titled above (copy attached), the action of the SEC in open court duly making a restitution settlement with the Employees Provident Fund (EPF) of the loss made in 2011, due to purported market manipulations regarding the purchasing of shares of LAUGFS Gas PLC. 

The above good governance action is a clear signal to many other independent public institutions, regulatory authorities and law enforcement agencies, especially the Central Bank of Sri Lanka, Anti-Corruption Commission, Financial Intelligence Unit (FIU), Sri Lanka Police, Attorney Generals Department and Auditor Generals Department. 

It will be the fervent hope of civil society and members of the EPF, that similar actions will be relentlessly pursued by all law enforcement agencies, to assure similar restitutions in connection with other well known and subjected to Special Commissions/Forensic Accounting investigated, related securities scams reported in the media and publicly agitated in the past.

Whilst congratulating the Chairman, the Board, and officials of the SEC, it is the writer’s fervent hope that such commendable actions, as well consequential actions of other independent regulatory agencies and law enforcement authorities will recognise the added value and due adoption of the following internationally accepted good governance law enforcement practices, especially in the absence of a National Crime Agency, capable of coordinating investigations:

1.The priority needs for future investigation of violations and crimes will adopt

• Effective networking with other associated law enforcement agencies and/or
• Conducting investigations jointly with other agencies and/or
• Conducting own investigations, with effective confidential exchange of information with other connected agencies and/or
• Arranging intelligence support from other agencies (e.g. Intelligence Support from FIU, Police to Police information exchange support from similar units overseas)                                            

Even in this specific case in question, other law enforcement agencies (e.g. Anti-Corruption Commission/Sri Lanka Police/FIU) may be or may have conducted connected investigations or associated additional violations related investigation. Similarly, other investigative agencies may be investigating cases directly or indirectly related to securities related violations investigated by the SEC in this case. 

2. Where such joint or coordinated actions are not in the best interests of the cases in any 

circumstance, at least prior to finalisation of a case under investigation, network inform by exchange of case details to other agencies with similar interests (e.g. in this case enquire whether there are any pending or completed but yet not progressed similar or associated violations being investigated by the Anti-corruption Commission, Sri Lanka Police, FIU or the Attorney General) 

Trust that value of the above international collaborative best investigation practices are duly recognised by the SEC, Central Bank, FIU, Sri Lanka Police, Attorney General’s Department and Auditor General’s Department, who are copied on this mail.