Good governance activist reiterates need for naming and shaming policy at the SEC
Sri Lanka’s advocate of good governance and transparency in the Colombo stock market has reiterated calls for naming and shaming crooked directors, controlling interests, auditors and errant regulators “who act against the interests of the investing public, the independent minority shareholders (IMS), and the national interest”.
While the Securities and Exchange Commission (SEC) pores over previously-closed files in alleged market frauds but is yet to file a case against any offender, K. C. Vignarajah has sent a letter to the SEC Chairman Thilak Karunaratne urging him on the need for an immediate review of the crisis at hand.
“Under the previous regime, the mafia was able, to applaud and lionise utterly crooked ‘professionals’ who posed off as economic, good governance and market wizards! They even forced out incorruptible SEC chairpersons and officials,” he has said, adding that the new administration must ensure a paradigm shift away from “deceiving, corrupt and crony capitalists”.
He said the SEC should ‘force the mafia to compensate the victims, while obtaining good revenue for the state and society.
Mr. Vignarajah urged honest corporate boards to declare good cash dividends and issue of scrip dividends. “It is the hallmark of good Boards of Directors , management and staff to plan and provide for wages, salaries, taxes, cash and scrip dividends and capital expenditure. The rewards of enlightened Creative, Competitive, Caring, Capitalism is demonstrably the more efficient form to serve society. This effectively follows the good democratic values of all the great religions, races and ethnicities.”
He said all transactions by controlling interests (CI) and related parties (RP) should be reviewed regarding offers on sale/acquisition/merger/transfers to subsidiaries, associates or related parties and similar deals. “Expose the so called “Independent” Directors/ Advisors/Auditors/Valuers/Company Secretaries who function as lapdogs of crooked CI&RP management, instead of being the watchdogs of Good Corporate Governance, accountability, (IMS), and the funds of the investing public,” he said.
The letter said the SEC should prevent compounding and regularisation of white collar crimes. It urged the elimination of insider dealing, reduction of public float, manipulation, ‘pump and dump’ and other malpractices.
He said IMS should be compensated as victims of these malpractices.
He said well-designed ESOP schemes may be permitted if they are not designed by the board to unfairly enrich themselves and a few cronies.“It is a shame that in Sri Lanka there has been no transparency of investigations, exposure and deterrent punishment for the big time crooks, the mafia and their cohorts,”Mr. Vignarajah said.