SEC accuses Vignarajah of ‘malicious’ claims; Harsha runs to his defence
View(s):Claims and counter claims flew across the media this week with good governance activists and opposition economists pitted on one side and the Securities and Exchange Commission (SEC), on the other.
The issue was over the recent SEC decisions to extend credit to brokers and lift a time-bound ban on brokers and their associates trading in their shares.
Governance activists like K.C. Vignarajah have raised concerns that such moves would only benefit brokers and the stock market mafia that is said to be controlling the market, and serve their interests.
A letter sent by Mr Vignarajah to the SEC Chairman Nalaka Godahewa and the commissioners last week and released to the media raising these concerns, drew a strong retort from the SEC, accusing the former of ‘deliberate misleading information’. The SEC said Mr. Vignarajah’s ‘purported communication to the SEC’, has little or no substance, but appears to have been written with a ‘malicious intention of bringing disrepute to the SEC and the market at large’.
Responding to Mr. Vignarajah’s statement that not many people were consulted on the decisions, the SEC said it consulted all the key stakeholders including the Colombo Stock Exchange, broking community, unit trust industry, margin providers, etc prior to the issuance of these directives.
It said the purpose of its media release was to “caution the general public against any deliberate misleading information which may attempt to disturb the general market sentiments”.
The SEC statement drew a stronger response from Opposition legislator and economist, Harsha de Silva, coming to the defence of Mr Vignarajah.
He said the ‘true colours of the controversial chairman of the SEC Dr Nalaka Godahewa has once again come to light with his statement to counter the widely publicized letter to the SEC by good governance activist Mr K.C. Vignarajah’.
“Sarcastically referring to Mr Vignarajah as just an ‘individual’ to downplay his long and continuous attempts to bring about good governance at the Colombo Stock Exchange, perhaps long before the current chairman first purchased a share, and referring to his observations as a ‘malicious attempt to mislead the public’ goes to show the depth of the sewage the Godahewa controlled regulatory body has fallen into,” he said in a statement.
Dr de Silva, who has often raised concerns of mafia-like happenings at the stock market, said it is well known that a certain politically influential group is behind the manipulation of the CSE to swindle unsuspecting investors and the large public funds also controlled by the same group and they are being protected by the restructured regulatory mechanism.
“However the recent coming together of eminent persons in the calibre of Chari de Silva and Mahendra Amarasuriya to fight corruption and build good governance at the CSE with Mr Vignarajah and others goes to show that we still have a good chance of creating a financial market that investors could interact with confidence in spite of the temporary phenomenon where a gang of white collar criminals believe that the CSE can be controlled for their own personal gain.” He wished Mr Vignarajah and the others continued strength to fight for truth and justice.
On Thursday, Mr Vignaraj wrote another letter to the SEC saying there were ‘half truths and untruths galore in the purported media release of SEC’.
He said that one cannot remove the safeguards until the required amendments are in place to prevent exploitation of the innocent independent shareholders, by the crooked insider dealers, market manipulators, front runners, pump and dump artistes, etc. Mr Vignarajah said he would send a fuller letter to the SEC once he is officially sent a response to his earlier letter.
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