Govt accuses few opposition MPs of being economic hit men

The Government yesterday accused few MPs of the opposition of systematically trying to destabilize the country’s financial system.

It said in a statement:"There has been a recent systematic effort to destabilize the country’s financial system by a few MPs of the UNP and JVP. Towards this end they have been consistently attacking the Central Bank, the EPF and the NSB. They have also attempted to destabilize the stock market as well to precipitate a run on deposits of finance companies by repeatedly stating that the fifth largest finance company in the country. The Finance Company Limited (TFC) is unstable and bankrupt. TFC has more than Rs. 20 billion in deposits and it is clear that these opposition MPs are clearly attempting to destabilize this organisation.

"A very clear statement was made by Sarath Amunugama about two weeks ago in Parliament stating that there is no risk in TFC and the financial system, but it would be useful if similar statements are made once again, both in Parliament and outside, since the opposition cry is made louder and ouder, in order to gain some traction towards this dastardly outcome.

"TFC is one of the several restructured companies which belonged to the Ceylinco Group and is today on the path of profitability, after a difficult journey in the aftermath of the Kotalawela saga. This financial institution was carefully nurtured back to financial health, with the appointment of a Managing Agent, the reconstitution of the Board, and the recapitalisation of the capital of the company. TFC has also retained several top level consultants to advise them on re-positioning the company and it is likely that over time, it would be one of the stronger finance companies in the financial landscapes. At the time of restructuring, new shares of the company were issued in a public share issue at Rs. 40 per share, and subsequently share trades even took place at Rs. 48 per share. Therefore, it is clear that the current reduction of the share price of TFC is not a reflection of a weakness in the company, but due to the present trend that the share market in Sri Lanka as well as share markets all over the world, have been subject to. Reference may also be made to the recent share issue of the new software giant, Facebook in the USA, where, shares were issued at US$ 38 per share which rose to US$ 42 per share, but has now reduced to US$ 28 per share! Here again, such reduction is not a reflection of any problem with the company, but rather due to the general worldwide trends that are taking place due to the global turmoil.

There have also been many attempts to discredit and damage the credibility of the EPF on the grounds that some of its investments have lost value in the stock market. It may be useful to mention that the EPF is a long term fund which aims for long term returns. Mention may be made that it is not a short term "hedge fund" or an investor who is functioning on a "margin account". That is precisely the reason why, even when the market was on an upward trend, and the EPF had amassed unrealized gains of over Rs. 19 billion in its portfolio, the EPF was not inclined to realize such investments and make a profit. In fact, the EPF did not do so, because it was convinced that it could make even better returns for its members over the longer time horizon. At the same time, it may be stated that all investments made by the EPF are based on careful analysis carried out by qualified and technically competent persons with experience, who are guided by a high powered investment committee. Further, the decisions of the investment committee are finally approved by the Monetary Board.

The current government has been in the forefront of protecting the entire financial system, and this fact is clearly borne out by recent efforts where Sri Lanka’s financial system has remained robust and safe even in the face of intense global instability. It is in order to disturb this situation and create chaos that opposition MPs seem to be pouncing on various perceived setbacks and attempting to make capital out of such situations. Further, this attempt to destabilize the economy of the nation seems to be similar to their previous efforts to stop the humanitarian operation during the period 2008-2009. It may therefore be necessary to expose this current blatant and international effort to destabilize the economy, and ensure that the people of this country are apprise of the hidden and ulterior motive behind these attacks, by these economic hit-men.

Key international organizations such as the IMF, World Bank and ADB have categorically stated that the Sri Lanka’s economic management is on course towards stability and growth, and these statements have been reconfirmed by all rating agencies, standard and poors, Fitch and Moodys. Therefore, even though the world is in serious turmoil and is undergoing serious complications, the Sri Lankan economy has been stated as being in reasonably good shape. Therefore, it is getting quite clear that the opposition is now getting desperate because they may have been hoping the Sri Lanka’s economy too, would have faltered in the face of the global situation. Since that does not seem to be happening, they are now also resorting to the despicable effort to target specific economic personalities, including the Governor of the Central bank, in order to create chaos in state institutions, and to destroy the trust that certain key institutions, and to destroy the trust that certain key institutions such as the Central bank have in the eyes of the people.

Since of late, certain MPs of the JVP have also undertaken a major effort to create unrest within the working population, by orchestrating concerted attacks on the EPF and the NSB. While the above mentioned points are valid in a response to their charges, it may also be mentioned that the JVP would be a least qualified political party which can speak about any losses to the State or the people. It was only just over 20 years ago that the JVP burnt thousands of buses, trains, motor vehicles, agricultural centres, post offices, community centres, private houses, government offices, transformers, agricultural implements etc, and cause enormous losses to the government and the people. They also caused a massive economic loss by closing factories, banks etc., and stopping economic activity while killing thousands of political and business leaders, village leaders, and many other innocent persons who were, in their language branded as "traitors". The loss that they caused has now been assessed and has now been estimated at around Rs. 60 billion. If therefore, the JVP is serious about making good their policy about minimizing waste and corruption in the country, they must immediately take steps to pay back the sum estimated a the loss caused by them, to the government and country and seek the pardon of the people for the damage and the destruction that they caused to this country.

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