While there were many political, social and economic developments across the country and of these, two events that drew our attention were the education crisis and the public appearance of a group of highly respected and seasoned investors. The education crisis has taken many turns – from the demand of a wage hike to a [...]

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The Sundaytimes Sri Lanka

Of mafia investors and education pundits

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While there were many political, social and economic developments across the country and of these, two events that drew our attention were the education crisis and the public appearance of a group of highly respected and seasoned investors.

The education crisis has taken many turns – from the demand of a wage hike to a higher allocation in the budget, while the group of investors on Thursday announced the formation of an association to represent independent and small shareholders in the stock market and ensure their protection; a long-felt need.

In fact, based on a Business Times poll which urged the formation of such an independent body we have been facilitating the formation of this group and pleased to see its progress.

The crisis in education is well known while the issues facing the stock markets was lucidly explained by K.C. Vignarajah, a veteran investor and spokesperson for the new group, who doesn’t mince his words – often calling a spade a spade.

Flanked by highly respected business professionals, now retired – Chari de Silva and Mahendra Amarasuriya -, and joined by a younger member of the forum, Chaturanga Perera, Vignarajah spoke on the machinations of the market and the mess that it was in, hoping that the new regime led by Nalaka Godahewa would stick by the rules and regulations and enforce it when needed.

De Silva had a reasonably grouse: Why isn’t the public and the media concerned about the lack of reasonable dividend payouts by listed companies? “Am I the only one asking these questions for many years? In the long term, better dividends are what attract investors but that doesn’t seem to draw any public attention.”

Journalists pointed out that this is because investors in the market, which has taken many twists and turns in recent years kicking up a lot of irregular deals and manipulative trades, are more focused on making a quick buck.

A large segment of unsuspecting retail investors are lulled into a comfort zone – virtually a trap – and trade on borrowed cash with quick returns. With a sizable portion of the inflows coming from credit, most rationale investors and the not-so-greedy reckon it’s only a matter of time when the credit bubble will burst, an issue that also forced the resignations of two respected public figures, Indrani Sugathadasa and Thilak Karunaratne, as chairpersons of the Securities and Exchange Commission.

A lot has been said about pump-and-dump, insider dealings and stock manipulation by us and other media. But the latest hot topic, courtesy the new investor protection group, is the emergence of a network of 2,-3000 investors operating on SMS, email and calls to manipulate the market in a push-up-the-price-of-a-low-priced-stock and after it rises, sell out.

The recent surge in George Steuart Finance, a relatively new stock initially valued at Rs 20 which peaked at an unbelievable Rs 1,500 per share, should be a good study and analysis for the new association, which hopes to focus a lot on research and challenge companies on their performance, based on evidence and facts – not shooting from the hip.

On this page, there is a lengthy explanation about the education crisis and the aspect of budget allocation. The writer argues with facts, figures and charts to strengthen his contention that the government should keep to its promise of 6 per cent budget allocation for education. His arguments are evidence-based and he has further shown the way in which such allocation can be made.

Education or stock markets, the list is endless when taking into account the numbers of sectors that are facing crises today. Veteran singer Sunil Perera’s satirical ‘Lankawe mehema wenne nehe’ some years back punning on the issues afflicting society has in today’s world got a bigger meaning.

“Is the President losing control”, asked the new investor-protection association based on the recent developments confronting the country.

What is not said is that many of these issues like blatant disregard by politicians of the rule of law remained on the surface during the height of the escalation of the conflict in 2005-2009 but voices were muted for fear of being labelled as unpatriotic or ‘pro-terrorist’ or being a victim of the white van menace.

Now more and more respected and professional Sri Lankans are voicing their opinions on various issues of public concern and demanding action and accountability from the government.

When a member of the forum, mischievously urged the media to ask questions “without fear or the white van,” laughter echoed across the auditorium.
While the comment was taken in the light-hearted spirit in which it was made, such nagging issues in the minds of public-spirited citizens and decent people reflect the thinking in today’s society: that the leaders of the government, whether guilty or not or just a perception, are responsible for some or all the ills of the nation.




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