I was perturbed to read in your esteemed journal, “The Business Times on Sunday” of 4th September 2011 that powerful forces were interested in removing Ms. Indrani Sugathadasa, from the post of Chairperson of the Securities & Exchange Commission (SEC).
She performed her duties in an exemplary manner under difficult conditions and enormous pressures. I have stressed to her critics, who thought that she and the SEC were not acting fast enough, that she had perforce been slowed down by the devils’ quoting scriptures and the devil’s advocates! Now I am sure that all the evil forces are in the list of those who want to get a person such as her removed, in order to continue with their devilry unchecked.
Ms Sugathadasa has given great leadership in pushing through measures like the price bands to possibly reduce insider trading and market manipulation. Other measures include the mandatory holding of private placements for at least one year and the allotment of shares under IPOs in a more equitable manner. These moves were meant to curb the huge profiteering by big timers getting the lion’s share through bank guarantees whilst the average decent shareholder got next to nothing for his/her troubles. Her stance in supporting the Director General and other positive forces at the SEC on the ‘Public float’ and her contemplated strong actions on various transgressors in fields which affect the rights and properties of decent Independent Minority Shareholders (IMS) must also be commended.
Other areas which need honest and determined leadership are the full restoration of broker credit, the vigorous implementation of the minimum ‘Public float’, thwart attempts to ‘restructuring associate/subsidiary companies’ to the detriment of the IMS, and amendments to the SEC and Companies Acts, to fill in the great void or lacunae in distinguishing the Controlling Interests (CIs) from the IMS. The latter group does not have necessary access to material and price sensitive information in a timely manner to make informed decisions on par with the CIs.
She has brought much needed fresh air into the leadership of regulatory mechanisms of Government. It would be in the interests of the nation and the President to not only retain her, but also to enhance her powers to act swiftly in the public interest without any fetters.
It is a great pleasure to note that you (Editor) have urged the authorities to resist any attempts to remove or transfer Ms. Sugathadasa. I trust that you will be able to continue unhindered in wielding your mighty pen to espouse the cause of fairness and equity in this matter, as you have done in many other vital instances.
K.C. Vignarajah
(Acting in the interests of the IMS and the
investing public)
Colombo
Private commercial banks and director appointments
It was the acknowledged standard practice of private commercial banks to appoint persons with private sector knowledge and adequate working exposure as directors and the banks benefited from their sound and critical expressions at director meetings.
Directors formulate policies and most, if not all such policies originated from the Chief Executive based on the requirements and needs of the bank to meet and fulfill the customer requirements and new implementation proposals, but the directors with their private sector experience make a noteworthy contribution. It is the Chief Executive with his/her banking operational knowledge, experience and skills that ensures the success and the progress of the bank. Officials in state organizations were never appointed as directors and that was also the wish and the desire of the shareholders.
But, in state banks, the Government appointed Chairmen and Directors take the credit for the bank’s success and instead of the Chief Executive and other Senior Management Officers they take upon themselves to represent the bank at numerous functions and the exorbitant cost to the bank including private travel of directors are never published and secretly maintained and even the staff or the trade unions are not aware.
In the recent past with the Central Bank and the Finance Ministry desiring to influence private sector banks they have got some state-owned organizations to invest on private sector shares and are thus appointing officials of such organizations as directors. The intentions are very evident. The state-appointed directors will induce and virtually compel the bank managements to provide funds to meet the expenses incurred by state- organized functions and even perhaps maintain buildings and other infrastructure at the bank expense.
If Sri Lanka succeeds in winning the bid to host the Commonwealth Games in Hambantota, the private banks and other private sector institutions will be compelled to fund all the infrastructure construction work. One minister recently revealed in a newspaper interview that 75% of the expenses of the Games will be born by the private sector. The Government will grant the private sector organizations certain tax and import duty concessions but the loss of Government will have to be borne with price increases and indirect taxes by the general public. These directors will arrange for the banks to reimburse their private excursion expenses and even demand the use of bank vehicles as it happens in state-owned banks.
By, now the Government should be aware of the hasty decisions they made without proper and adequate investigations and properly assessing the probable costs in relation to the Hambantota Harbour, though a necessity, having to relocate the airport, the expenses on highways and thus should not interfere in the management of the private banks, leave it to the private sector management and the Government will not have problems. In this context, latest reports that a state official has been appointed to the Sampath Bank board following the developments at some other private banks (of state officials being appointed to the boards) is an unhealthy practice which should have been avoided.
Ex-private sector
bank employee
Colombo
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