Colombo’s share market was gripped by a crisis centering on Securities and Exchange Commission (SEC) Director General Malik Cader’s imminent resignation along with some other commission members also possibly stepping down, while many investors posed the ‘what next’ question.
SEC commissioners met on Friday morning at an emergency session but details of the discussion were not revealed. Speculation about Mr. Cader’s future due to pressure exerted by a handful of powerful people widely known to be close to the authorities, was rife in business circles. Many said the main grouse by those who complained against Mr. Cader was that the share market was ‘overregulated’, which is why the indices are down at most times.
But others say some top investors were furious with the SEC for cracking down on market manipulators who resorted to ‘pump and dump’ to make a fast buck as the authorities closed in on them. “These high networth investors (who allegedly complained against Mr. Cader) had visibly refrained from their usual trading activity to drive a point on what’ll happen to the market if they don’t invest.
Then when the market crashed they could point fingers at SEC,” a source close to the SEC told the Business Times.
He said that if Mr. Cader resigns, some other commission members are also likely to step down. Sources close to Mr. Cader confirmed that there is immense pressure on him pertaining to certain recent investigations by the SEC.
A top businessman on the basis of anonymity told the Business Times that it’s a ‘sad’ day for Sri Lanka’s capital market. “The SEC brought in many things and it was a trial and error situation. It’s unfair to single out ‘a’ person and the person who had taken this decision (to target the DG) was ‘clearly’ misguided by vested interests,” he said.
Some businessmen were appalled at the ‘power’ that this small group of high networth investors can wield.
“The regulators shouldn’t be meddled with according to those people's whims and fancies. What the 'top' doesn't comprehend is that such action against Cader can give a wrong signal to long term foreign investors who we need for sustainability in the market,” another businessman noted.