COPE boss wants to destroy share market Mafia

* ‘SEC should be strengthened without delay’
* ‘Monitor EPF investments carefully’

Parliamentary Committee on Public Enterprises (COPE) Chairman D. E. W. Gunasekara yesterday (07) urged the authorities to strengthen the Securities and Exchange Commission (SEC) in order to take down the influential group of investors who were operating a ‘mafia’ in the Colombo Stock Exchange.

The Chairman and top officials of the SEC were summoned before COPE yesterday where the committee grilled them on recent developments in the capital market and other details concerning the financial accounts of the SEC.

"We had a frank discussion with the officials of the SEC and the (COPE) committee was happy and satisfied with its performance. We are convinced that there is a mafia running the country’s stock exchange and we believe the SEC should be strengthened further to tackle this problem," Gunasekara told The Island Financial Review after the meeting.

"The SEC Act has to be amended to give the regulator more powers to deal with this mafia and we believe this has to be done without any delays. We asked the SEC to work on the draft amendments as a matter of priority and present it to parliament," he said.

Gunasekara told The Island Financial Review that the COPE was convinced that a mafia was operating in the country’s bourse and this was also impacting the economy.

"We need a strong regulator not only because it is good for the stock exchange, but because it would be good for the entire economy. We believe that 88 percent of total market activity is triggered by a few investors, and that some of them with certain broker firms are playing the game (marker malpractices). The number of minority shareholders active in the market is negligible and we need to attract more investors from the public," Gunasekara said.

He said the SEC should continue with its ongoing investigations into market malpractices and that the COPE would support it.

"Details of these investigations were not divulged to us because the investigations were on going," he said. The SEC is expected to finalise a report shortly on investigations, especially the fiasco concerning the NSB and The Finance Company.

"We have to appreciate the role the SEC played in nullifying this deal, despite the severe pressures it was facing from some quarters in doing so. Luckily a public institution was involved, if it was two private entities then nothing would have happened."

"We also asked the SEC to look at EPF, ETF investments very carefully," Gunasekara said.

Sources said the SEC had told COPE that it was the Central Bank which had jurisdiction over the EPF.

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