Another epic lie of Colombo Stock Exchange -Mangala

(Lanka-e-News- 14.Sep.2012, 10.00PM) In an incongruous turn of events the Colombo Stock Exchange ha become the third best performing stock market in the world, over the last month, according to reports i the state media and broadcasters affiliated to business tycoons under scrutiny by independent securitie regulators. The report comes just weeks after the appointment of Nalaka Godahewa as Chairman of th Securities and Exchange Commission, a move that has been likened to putting a fox in charge of th hencoop.

Godahewa is SEC chairman for one reason and one reason only to protect the interests of the very marke mafia that is running the bourse to the ground and is therefore, supposed to be under scrutiny by th regulator. Godahewa is an appointment sanctioned and mooted by the mafia, run by business tycoon whose affiliations to the incumbent regime need no second telling

Rampant corruption, cronyism and insider trading has led to the implosion of the CSE, which was th worlds best performing stock market just months after the end of the conflict, buoyed by Sri Lankas post war potential and investor confidence. That same confidence has been turned on its head today, with th same market being rocked by scandal and allegations of unimaginable corruption. The CSE has seen it value plunge by 26 percent over the last year, as state appointed securities regulator after regulator hav quit in disgust at the way the market is being run

Last month, Securities and Exchange Commission Chairman Tilak Karunaratne quit his position, saying h could no longer fight against a mafia of crooks preventing SEC investigations into pump and dump con that were shaking the market to its core and completely swindling the small retailers investing in th market. Karunaratne, upon his resignation from the post for which he was handpicked by President Mahind Rajapaksa said brokers were involved in the scams that were being perpetrated by a handful of high ne worth individuals manipulating the stock exchange. Karunaratnes predecessor at the SEC Indran Sugathadasa, a highly respected public servant also resigned last year, saying she was unwilling t compromise her principles. Currently, there are 17 high profile cases of insider trading and othe irregularities under investigation at the SEC. Many of them, Karunaratne has claimed have been put on th backburner on the instructions of higher echelons of power. According to Karunaratne, he was given a no so subtle message to quit his post through emissaries of the very man who placed him in the chair Mahinda Rajapaksa

The story of the Colombo Stock Exchange is therefore, now becoming abundantly clear and the lack o investigation and acceptance of this status quo by the ruling regime has been criticized by internationa financial lending agencies such as the IMF, whose loan tranches to Sri Lanka are conditional on fisca responsibility on the part of the Sri Lankan state. The bubble that was the CSE soon after the end of th war, has now burst, resulting in the bourse losing more than 5 billion dollars in value within six months leaving the high profile stakeholders in the Stock Exchange desperately seeking scapegoats for mitigatin their losses. Ably assisted by brokers, they are preying on the carefully invested savings of ordinary people spurring them on to invest in dud companies by pumping money into the dodgy stocks, only to flee whe the time is right with their winnings, leaving the small investor high and dry, often with less capital tha they started out with

The time has come therefore, to stop bandying words. The crisis in Sri Lankas stock exchange is simpl put, a money laundering Ponzi scheme, orchestrated by certain high net worth individuals; individuals tha are protected by the regime because they also look after the financial interests of the ruling family. Th breakdown of the rule of law, that is leading to the enactment of the law of the jungle in every aspect of Sr Lankan life at the hands of this regime has now pervaded the financial system, a harbinger of almos certain collective doom for the citizenry at large

Laughably, these same individuals, led by the likes of Dilith Jayaweera claim that the bourse is sufferin

from over-regulation an incredulous charge since unprecedented insider trading and market manipulatio notwithstanding, not a single individual in Sri Lanka has been prosecuted and jailed for securities fraud

With the government firmly on the side of these white collar crooks, because of the wealth they wield, th question of who will protect the small investor must be raised. Who will come to their defence when the trust in the governments reassurances that the stock market is a safe investment and feed their sav ings t the corporate sharks lurking beneath the surface of the murky waters of the exchange? As the government aims to obtain more international loans to finance its extravagant habits and courts international image building by holding the Commonwealth Parliamentary Conference in Colombo, an agenda dominated by Rule of Law issues and democracy, one has to marvel at this regimes tremendous ability to orchestrate public relations stunts while the country is being engulfed in flames of corruption and rampant economic mismanagement. The government, in its blas acceptance of the Sugathadasa and Karunaratne resignations and appointment of Godahewa as their regulatory successor, proves beyond doubt that they take no issue with the fat cats continuing to fill their pockets with stolen gold, as long as a share is carefully apportioned out to the regime in exchange for its silence.

By Mangala Samaraweera MP