Kurunegala leads the way in the fight for small investors
Enough is enough. That is the decision taken by the Kurunegala Small Investors’ Association Sri Lanka (KSIA) during a consultation in Colombo on Thursday on protecting minority small shareholders in the stock market with K.C. Vignarajah, a staunch defender of retail investors and a good governance activist.
KSIA was formed around four years ago with about 50 members as these small scale investors found that they have been allegedly deceived by the regulator in being lured to invest in the stock market. From the point of their investing in the market they have not only received any returns, but as things stand now they have lost their money, too.
Pradeep Senaratne, President, KSIA told the BusinessTimes (BT), who with his colleagues travelled to Colombo to highlight their situation, said the KSIA has been agitating persistently to get adequate returns on their investments and now they have found they have completely been duped, and “had they known the stock market is such a dirty untrustworthy place’, they would never have invested in stocks.
He said four years is a long time in the case of investments and if they don’t find an urgent solution they are prepared to take the strongest action, such as surround the SEC Office and launch a Sathyagraha (fast unto death) as they have been fed with ‘fairy tales’ by these officials and the media in promotional campaigns, and now could not feed their children due to lost investments.
Their concerns came just as the SEC announced the possibility of forming a Minority Investors’ Association for stock market investors. The SEC in a public notice called for public representations and also from former Executive Directors/Chairmen of listed entities for their ideas on the proposed association.
Mr. Senaratne said that they have endorsed the call by Mr. Vignarajah and recently by Wijeya Gunawardena, President, CIFL Depositors Association, that there should be a safety net to safeguard the investments in any financial institution or in the stock market. If this vitally important safety net (by way of an insurance scheme) is not provided, they would call on all the prospective investors not to invest in any financial institution or the stock market.
He said that they have already taken necessary initiatives to motivate and mobilise the setting up of retail investors’ association branches across the country.
He is of the view that they would not be able to fight the ‘giant’ SEC and force the government to take necessary steps to put the whole thing into a stable and trustworthy process, without a concerted and strong force.
They have also written to the President and plan to complain to the Human Rights Commission.
Mr. Senaratne said that the notices and other documents issued by the SEC are in English and the KSIA is alerting the Ministry of National Languages and Social Integration to issue instructions to the SEC to issue all these material in Sinhala and Tamil too.
The KSIA President pointed out that after going through the financial statements of companies only they decide to invest, but in some cases they have found that those financial statements give wrong information. He said that some of the examples are CIFL, Touchwood and PC House.
The KSIA further pointed out that another institution that is responsible for financial mishaps and failures of corporate entities is the Institution of Chartered Accountants of Sri Lanka (CA) and indicated that there could be flaws in reporting by accountants and auditors and the responsibility of the Accountants and Auditors have been questioned for the collapse of Golden Key, Pramuka Bank, the collapse of Ceylinco Group and CIFL.
The BT asked Mr. Vignarajah as to what happened to the proposed Small Share Holders Association that was planned to be formed in Colombo. He said that the mafia in the stock market is still active but noted that the proposed association and its formation is still in the pipeline and would be revived with more vigour and also ward off any (possible) mafia influence or infiltration. They would also like to join hands with other like-minded institutions, like the KSIA.
The KSIA is also exploring the possibility of joining hands with other similar organizations as stronger their power, better are the prospects of fighting for their rights. In this sphere, they have already initiated talks with the CIFL Depositors Association.
Mr. Senaratne urged other small investors to contact them, if any individual or group of small investors to form branches etc. His telephone number is 0773123403.