Investors of some banks ‘coerced’ to open margin trading accounts, top governance activist says
View(s):Concern has been raised over some banks being influenced and coerced to request independent minority investors (IMS) in Sri Lanka to convert normal overdraft/loan facilities granted for investments to margin trading accounts, a top investor and governance activist has said.K.C. Vignarajah, a well-known fighter of the rights of small investors, said in a letter to the Chairmen of the Securities and Exchange Commission (SEC) and the Colombo Stock Exchange (CSE) that customers have been told that these valuable assets could be transferred to margin trading accounts if part of it is used to invest in listed company shares.
“The best banks with management and staff dedicated to the best tradition of banking, will certainly not heed such advice or request. The culture of such banks will not permit any of them to forsake the customers’ interests,” he said in the letter.
He said undesirables brought in through the back door to the boards of companies by outside powerful forces have occasionally been, and must in future be, thwarted by powerful employees’ unions, alert customers and concerned shareholders. “I hope they will continue to ensure this position in all banks. A bank’s primary responsibility is to nurture the faith, confidence and ease of doing business,” Mr. Vignarajah said.
He said a cabal of crooked persons belonging to so-called reputed professions/ institutions influences codes of best practice/ethics and their implementation are behind these moves by some banks.
Some of the honest officials of the SEC have for many years been trying to implement their prime role of protecting the investors in the stock market, but appear to be hampered in doing so by powerful forces inimical to this fundamental process, he added