Thilak says ‘market stability’ his first priority
23 January 2015 04:17 am
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Thilak Karunaratne, who is to assume duties as Chairman of the Securities and Exchange Commission (SEC) told Mirror Business that his first priority is to stabilize the country’s capital market. The announcement of Karunaratne’s return as SEC head has evidently sent shockwaves among some capital market stakeholders as he is perceived a tough regulator, tirelessly going after market malpractices, at times even at the risk of upsetting market sentiment.The market which reacted negatively to the news during the morning hours of yesterday, recovered strongly during the latter part, with the main All Share Price Index gaining 0.07 percent and posting a revenue of Rs.1.19 billion.
“My immediate priorities after assuming duties are to stabilize the market and get the house in order. A meeting will be held with the Colombo Stock Exchange (CSE) board to discuss steps required to stabilize the market,” Karunaratne said.He also noted that he will have to ‘clean up the stables’ as certain appointments that have been made at the SEC during the last two years were said to be not in line with the establishment code.
Karunaratne was first appointed SEC Chairman in December 2011 when the then Presidential Secretary’s spouse Indrani Sugathadasa resigned from the post to ‘uphold her principles.’However, he could survive less than a year in the post, as he was asked to step down by the then regime for supposedly antagonizing some high net worth investors and influential stockbrokers.
When Karunaratne resigned, 17 investigations into market malpractice were ongoing. His successor Dr.Nalaka Godahewa later said all or most of those investigations have been concluded.“I will start from where I left off. But before that I will do a study of what happened during the last two years and then only set course. I’m not on a witch-hunt. That should be made clear,” he stressed.
Meanwhile, Karunaratne stressed the immediate need to push the enactment of new laws drafted under the new SEC Act, which have been put into the back burner at the Treasury since 2013.
According to the current SEC Act, the regulator has the powers to initiate criminal court action against those involved in market malpractice. But since it’s the criminal courts, the regulator has to prove an offence beyond reasonable doubt, which is extremely difficult.
Therefore many have emphasized the need for new laws to enable the regulator to take offenders before civil courts where heavy financial penalties can be imposed.Mirror Business reliably learns that Karunaratne’s appointment letter as SEC Chairman will be delivered to him today.