9th January 2000
The Securities and Exchange Commission (SEC) has taken legal action against a top stockbroker for alleged market manipulation, on a leading commercial bank.
The broker is a director of a leading stockbroking firm. The notice of action issued recently by the SEC, was against the individual stockbroker and not the company.
The stockbroker was given time till last Friday to respond to the notice. If found guilty, the broker could face a five-year prison sentence or a maximum Rs. 10 mn fine.
SEC Deputy Director General, Ajith Perera confirmed that the SEC had issued a notice of action as the broker had violated rule 19 of the SEC Rules, but declined to give further details.
The move follows a lengthy probe launched by the SEC into the stock market transaction of the stockbroking firm after some unusual price movements were noted during the final days of trading in 1998.
The sudden upward movement on the Colombo bourse led to speculation that share prices had been manipulated.
The SEC during the course of the investigation questioned the buyer and the seller. They also checked out the trading records of the stockbroking firm.
Brokers at that time had said that they had noted some unusual movements in the prices of certain shares, including blue chips at the time and speculated whether they were being jacked up by firms with equity investments.
The SEC also issued a notice of action to two fund managers attached to CTC Eagle Fund Management Company Ltd on the basis of market manipulation last month. They were also given time till last Friday to respond to the notice.
The overnight repo rates were brought down by 25 basis points to nine percent last week - a signal that interest rates could reduce further, moneybrokers said.
The Central Bank said in a recent release that inflation has declined steadily in the last quarter of 1999 and stood at 4.7 percent on a moving average basis at the end of last month. The repo rate has been reduced in several steps from 12.10 percent in September 1998 to 9.25 percent in November 1999.
With foreign exchange markets being stable, and inflation continuing on a declining trend, the Central Bank has decided a further reduction in the repo rate if needed, moneybrokers said.
Meanwhile the Central Bank announced last week that the government hoped to raise Rs. 25 bn in government securities during the period January to March 2000.
Of this, Rs. 5 bn will be issued by way of Rupee loans and Rs. 20 bn by way of treasury bonds. On January 3, 2000 Rupee loans amounting to Rs. 5 bn with an optional maturity period of 8-10 years at a 12 percent interest rate was available for subscription. The total treasury bond issue for this month will be Rs. 11 bn with the maturity period ranging from 2-6 years at different coupon rates. These bonds will be issued at weekly auctions.
In view of high liquidity in the market and the anticipated decline in inflation rates, the coupon rates for respective maturity periods of treasury bonds have been lowered by 25 basis points.
Sampath Bank's floating rate debentures commenced trading on the Colombo Stock Exchange on January 6 th, 2000. The unsecured subordinated redeemable debentures were due to be issued in September last year. However the bank was prevented from issuing the debentures as the Colombo Stock Exchange felt that the interest payments were too complex for investors as the payment date straddled two quarters. The bank therefore amended its trust deeds to simplify interest payment dates to make them coincide with separate quarters, prior to issuing the debentures, stock exchange sources said.
26,722 debentures were taken up and the floating rate for the quarter commencing 1 st January and ending 31 st March 2000 will be 12.68 per cent. The issue was one of three tranches issued by the bank with the objective of raising funds for granting medium and long term credit facilities. The issue was also meant to form part of tier 2 capital and increase the capital adequacy ratio from 10.1 per cent to 13.2 per cent.
Meanwhile the bank's board resolved to declare a 31.25 per cent interim dividend and will be retaining 80 per cent of the dividend in order to make a partly paid ordinary share of Rs 8 a fully paid ordinary share of Rs 10. Although the bank's articles of association permitted it to retain a maximum of 10 per cent of a dividend, a resolution passed at an extraordinary general meeting facilitated the additional retention.
Sampath Bank has been dogged by rumours that Stassens' chief, Harry Jayawardena is increasing his stake in the bank following Distilleries Company and Stassens increasing their stake in the bank. Mr Jayawardena heads both these companies and is also a director of Hatton National Bank which holds a 8.7 per cent stake in the bank. Other stakeholders include the National Development Bank 8.1 per cent, DFCC 3.4 per cent and Bank of Ceylon 2.8 per cent. Distilleries Company has a 3.1 per cent stake in the bank while Stassen Exports controls 1.3 per cent of its share capital.
Commercial Banks will be required to raise their Capital Adequacy Ratio (CAR) with effect from January 1, 2001, the Central Bank has indicated in a circular to all commercial banks.
The minimum CAR of eight percent will be raised to 10 percent, while the core capital ratio of four percent will be raised to five percent, the Central Bank said.
The CAR represents the ability of a bank to meet the needs of its creditors in terms of available funds.
Over the years, the domestic banks, both state and private, were experiencing an erosion of their capital base. Their risk weighted capital adequacy ratio (CAR) based on core capital has been declining since 1996.
Though the Central Bank has proposed to the banks an increase in the minimum capital adequacy standards to five percent for core and 10 percent for total capital, the timetable is unclear till the circular was issued.
The foreign banks strengthened their capital adequacy and reached CAR of 14.7 percent. So far the reliance on tier two capital is very small and consequently the core and total CAR's follow largely similar patterns.
But in 1998, the private domestic banks took the novel step of raising tier two capital by issuing subordinate debt, increasing their CAR based on total capital.
To be eligible for tier two capital, subordinated debt must be of at least five year maturity. In fact all debt issued was for exactly five years, and the Banking Supervision Department is amortising the amount by one fifth every year for capital adequacy purposes.
Since the subordinated debt is tradable, the differential prices quoted offer a market assessment of the soundness of the banks in question. In fact most of the issued debentures are presently trading below par - an indication of what the public perceives its worth, banking analysts say.
Of the listed banks, Sampath Bank and Commercial Bank are comfortably with their CAR, while Hatton National Bank is presently just above. The proposal could trouble the two state banks whose present CAR is quite low.
The beginning of an year is a time to look at what the year holds out in various fields of national life.Will the year 2000 be one of promise? Will the economy revive and commence a high growth path? Or are we destined to traverse a path of slow and inadequate growth? These are the questions in the minds of businessmen and those interested in the economy.
Three important factors would determine the out-turn. First, the attitude, approach and actions of the government on the economic front. Second,the global conditions and how we are to respond to these.Third the all important question of peace.
It is vitally important that the government places a priority on economic affairs, faces economic issues in a businesslike manner, plays a pro-active role and ensures a speedy implementation of government policy. All these we have repeatedly stressed in these columns because they are critical ingredients to economic success. The government's actions in the next few weeks would be eagerly watched to discern a more active and serious approach to economic issues than has been witnessed in the recent past.
Global conditions are beyond our control.The global environment it appears would be favourable.The economic upturn in the crisis ridden countries and a faster growth in the developed countries would boost our exports. Improved markets for our industrial goods should be most welcome. The trend of improvement in our exports in the last two quarters of 1999, compared to the earlier two quarters gives us some hope that the worst is over.
The Central Bank estimates a growth of 3.5 per cent in manufacturing owing to better market prospects. Last year's poor performance in agricultural exports was mainly due to low prices in tea and rubber our main agricultural exports. Prices have picked up and there are indications that the demand for tea would be greater than the world supply. This would result in better prices than we experienced in 1999.
We can therefore expect a better export performance. Yet one question mark is whether the Asian economies which underwent the crisis has emerged stronger and whether they now have a competitive edge over us in many of our industrial exports. Sooner or later we may have to consider our exchange rate policy to remain competitive in the international market.
The third factor of peace is anybody's guess. The fact is that the SriLankan economy has survived reasonably well for a war torn country. The realistic approach should be to assume the continuation of the war with all its attendant setbacks to the economy, but not make it an excuse for poor performance. If we achieve peace it would be a huge bonus, not because of the savings in war expenditure, but the fact that business confidence would be restored and a large inflow of foreign investment could be expected. Let us hope for such a peace dividend but continue to build our economy without such an expectation.
As we commence the new year, let us hope that government policy and actions would ensure a revival of the economy.Let us hope that we could harness the improving global economic conditions for our benefit.And if in the fullness of time we are blessed with peace that our economy may soar into much greater heights than in the past.The Central Bank's expectation of a 5 per cent growth is just not enough.
The global conditions are a determining factor for the country's economic performance. Exports are a very significant factor as the country's dependence on exports can be gauged by the fact that they are around 40 per cent of Gross Domestic Product. The fortunes of our exports affects us in many ways. It is not only that foreign exchange earnings would drop, but the incomes of people and corporate earnings would fall. The government too would be affected as the reduced export incomes would slow down economic activity and thereby diminish government revenue.What then are the global prospects and specifically how are global conditions likely to affect us?
Today many professionals and others,
By Ananda S. Wijesuriya
"Fined, rupees one thousand five hundred' boomed the voice of the court interpreter.
There, I stood in front of the Magistrate presiding over the courthouse of a town some distance away from Colombo, facing a charge of 'failure to avoid an accident'. It took exactly one and half minutes to finish the case. The extra half a minute was due to the fact that in my naivete, I entered the courtroom half an hour before the Magistrate ascended the bench and went in and occupied a seat inside amongst the crowd. Five minutes before the activities started a throng of people rushed in and crowded in front of me. When my name was called, I had to push my way to the front. By the time I reached the place where the accused should stand, the charges have been read out and the lawyer I had retained had already started making his submissions.
It all began on a sunny Sunday morning, when I was returning home after spending the previous day at a hill resort. I was driving leisurely, enjoying the beautiful blue mountains, trees and the lush greenery, when on a long stretch of road I saw a bus halted facing my direction. I naturally slowed down and as I drove up to the bus, it took off. At that moment I was abreast of it and a boy recklessly jumped from behind the bus right onto the path of my vehicle. Instinctively I jammed on the brakes, which made a screech that broke the peace of the area, to halt my vehicle. I believe the vehicle actually did not hit the boy, but the momentum of the jump itself made him to fall onto the bonnet of my car that stopped dead on its tracks, and then on to the road and knocked himself unconscious. Immediately I opened the door and ran to the boys aid and simultaneously, God only know from where, at least 20-30 people came running with the mother and older brother of the boy, wailing. I saw the bus too stopped and people were running back. Although my immediate concern was to assist the fallen boy, his brother's priority was to try to assault me. With a barrage of filthy abuse, that I could not believe would be in the vocabulary of such a young one, he came charging at me. I held him off and called out to everybody that the priority is to get this injured person some medical attention and after that the question of assaulting me could be addressed to. Fortunately there were a couple of elders with saner council and together we tried to stop a passing vehicle. Three or four slowed down and on seeing the fallen boy, speeded and rushed past. A few minutes later, a bus stopped and took in the unconscious boy, his mother and another and went along to the nearest town.
Later I learnt that this boy's father is a CTB employee and the child, who is eleven years old, waits opposite his house around that time to hand over the lunch parcel to a bus to be carried to the depot. His leap across the road was on completion of the task and therefore, the willingness of the buses plying on the road to come to his assistance was understandable. The fact that the fallen boy was removed from the scene helped to calm down the mob, although the brother was impatient and spoiling for the application of the law of the jungle, that was 'postponed' in order to attend to the injured.
I brushed him off and on making inquires found a house close by that had a telephone and called the nearest police station. To the credit of the officer concerned, the OIC of the Traffic Division came in person within a few minutes. After inquiring into the incident and learning that the fallen boy had been rushed to the hospital, he made his notes and asked me to follow him. At the police station, after taking down my statement, the OIC admitted that under the circumstances there was little else I could do and the boy had been lucky not to be run over. However, the procedure required that he would have to detain the vehicle for testing of brakes. I knew I had no choice and I did not have any acquaintances amongst the hierarchy of the Police Force whose names I could have used to influence him. The procedure states that as long as a person is injured, an examiner of the RMV should test the vehicle for roadworthiness. The OIC very kindly volunteered the pleasant information, that in the event the boy dies, I would be arrested and it is best that I make arrangements for legal representation, if I wish to avoid being remanded.
Today many professionals and others, an increasing percentage of them from the fairer sex, are driving, either a vehicle given by the employer or their own. This trauma and the whole series of episodes afterwards culminating with facing the Magistrate made me realise that, through no fault of yours, one could end up in a situation that could possibly ruin your career or even life. The chaotic traffic, the density of vehicles and the ever growing population are such that it is possible any one could end up facing a charge of 'causing death by failure to avoid an accident'. Invariably it is the party that ends up without an injury that could be called upon to face this charge. That of course is the aftermath of extricating yourself from the scene of the accident, without being assaulted, a definite possibility in the event a fatality occurs.
Since the word 'accident' itself is defined as 'anything that could happen by chance, unexpectedly or unintentionally', and in a road involving at least two parties, how does one 'prevent an accident'? One of my colleagues used to say that possessing a driving license does not mean one is competent to drive. Seeing how some insist on not only endangering themselves but other road users too by their road manners, one has to agree with him. Leaving that minority with homicidal tendencies aside, I tend to believe, that the traffic, driving habits, behaviour of all road users including the pedestrians and most importantly by the road conditions, are all contributory factors and are responsible for 'failure to avoid an accident. Today, in most parts of Colombo and suburbs, the roads are in a state of disrepair. For all my attempts, I have never got an answer to the question as to why is it that no road lasts more than six months to a year. Even those 'highways' we have built with foreign assistance/aid/debt, constructed or supervised by western /developed country contractors, after a while become unsuitable for safe driving. These days, if you happen to drive out to the country's only international airport, the premier road ushering in millionaire investors, tourists as well as our own citizens returning after a 'hard-labour exile' in Western and Eastern Asia, you will witness that it is in such a derelict state, it begs the question, does not anybody care? Can we have such a callous administration that would blatantly ignore the responsibilities? In this aforementioned stretch of road, just after the bridge, one has to concentrate to avoid the ruts on the road, and on a typical evening you can have hundreds of employees streaming out of factories. They are as eager as you are to return home and will dart across the road in front of you, expecting you to avoid an accident giving them safe passage.
In most parts of the country, typically, the road edges are broken and jagged, therefore, the cyclists; both pedal and motorised would avoid the serrated edges. When they come across a pothole in their path, many per kilometre, they would invariably try to avoid them and cut on to your path. On a rainy evening or a night along a badly-lit road you would hardly see them at a distance since the pedal cyclists never have any rear warning illuminators, nor the head lamps. If you happen to be driving with you're headlights dimmed, then the chances of seeing them at a distance is limited. Even if you are crawling in a traffic jam, how do you avoid a cyclist cutting onto your path? When they get knocked down and become the victim, it is you who have to explain why you failed to avoid an accident. We now have a new breed of pedestrians, who will disregard the zebra crossings, sometimes a mere ten yards away, and boldly step in front of your vehicle with her/his hand raised. Often they are children and elderly citizens, who would be naturally impatient.
I read in the newspapers recently that when a vehicle knocked down a schoolboy, his companions assaulted the driver and the occupants, set fire to the vehicle and even attacked and damaged a police vehicle that went to quell the mob. In the incident I was involved in, the OIC traffic told me that I was very lucky since a few weeks ago, after another accident in the vicinity, the people in the area mercilessly assaulted the driver and set fire to the vehicle. Lots of my friends told me that they would have never stopped but would have driven straight to the nearest police station. But, seeing a helpless boy lying on the road unconscious, my safety was furthest from my mind. However, after my experiences at the scene of the accident, I realised that one would risk the life and limb in stopping to help a victim. For a period of time when sanity and reason has fled the scene and emotionally goaded by a wailing mother and a raging brother, bent on extracting the pound of flesh, I was tempting my fate by being a law abiding citizen. I had to agree with the OIC, Traffic Police, that my guardian angels would have worked overtime. If anyone were to drive away from the scene, after an accident in an isolated area, now I would fully understand why and even sympathise.
You have studied hard, acquired experience and qualifications and on becoming a professional, is climbing up the corporate ladder and rewarded by your employer with a fully expensed car as a perk. If you are confronted with an angry mob at the scene of an accident, how will you cope with such a situation? Today's yuppies should understand the success they achieve in career through dedication and hard work has its own share of positives, as well as negatives, surprisingly, one of them could be possessing a vehicle.
One would improve her/his living standard and in most positions in both the public and private sector, one could have a vehicle as a perk. In Sri Lanka a vehicle is yet a status symbol, an icon of 'haves' or 'the elite'. Some years ago, at a seminar discussing business ethics, a prominent corporate personality offered the thought that driving a company vehicle is one way of displaying 'ostentatious living'. He contended that with a pathetic public transport system that fails to cater to the needs of the masses, one travelling in comfort could provoke these hapless frustrated commuters waiting in crowded bus halts. I do not wholeheartedly agree with him. However, in a scene of an accident when emotions are running high, especially in an area of less affluent living, you being in a vehicle portraying a 'class' above the 'holi-polli', is not opportune. Unwittingly you may be providing, for those who claim to have been constantly deprived by the society, an occasion to deal with the 'oppressive class' and get even with them or 'teach them a lesson'. Additionally, if you have been reckless, then God help you!
I did not have, neither did I want to use any influence to squash the proceedings, as it is not the right thing to do and went through the whole process. The very next day I made inquiries and with the help of a courteous and helpful telephone operator was relieved to learn that the boy had regained consciousness soon after admission to the hospital. He had not suffered any injuries but as a precaution he would be kept under observation for 24 hours and would be discharged. I also co-ordinated with a conscientious motor car examiner attached to the RMV, who accompanied me to the police station after working hours to examine the vehicle and release it. The OIC Traffic did tell me that despite the fact that there was nothing I could do to avoid the accident, the vehicle being in perfect road worthy condition and I was driving soberly at a very moderate speed as confirmed by the tire marks, he still has to follow procedure. Although the boy did fail in his suicide attempt and was discharged from hospital after a 24 hour observation, I still had to face the charge of 'failure to avoid an accident. I told him, I do not agree with him but yet I have no right to tell him what to do and if it is the procedure, I very well understand it.
The lawyer I retained, from the town where the Magistrates Court was situated, (we met for the first time) gave me 'sound' advice. His position is if I plead 'not guilty', the case would go for trial and drag on for years and I will have to make appearances and 'waste' my time. Being a busy person, 'it is not worth spending my time like that' and a conviction for this charge 'does not amount to any gravity', therefore, it is far more practical to plead guilty and pay a fine. Mind you, he had not found what the charges were and assumed that my version of the story was correct. In my experience, a lawyer is trained never to assume anything but there are two sides to any story. Nonetheless, I believe he knew what he was talking about and his intentions were meant well, since most of my friends also 'advised' me on the same lines.
So there I stood before the Magistrate, without getting a chance to open my mouth and put in a word, found guilty on my 'own pleading' of 'failure to avoid an accident', being fined. Justice meted out.
If I thought that was the end, I was in for more surprises. In my naivete, I went to the courthouse without attending to the 'necessary arrangements'. It appears that the 'system' incarnates you when you are found guilty and fined until you settle the Crown's (State) dues. If you are unable to, like in my case, I am confined in this court house cell unable to get to the Registrar to pay the fine, the State would gladly keep me herded along with the rapists, murderers, petty thieves and what nots. I had my share of glorious moments in the cell with them, until the lawyer saw my predicament and came up to me and 'borrowed' the necessary funds to pay the fine himself and produce the receipt. Or maybe in his practical approach to any problem, he would have realised that he has little chance of recovering the fees as long as I am in the cell!
Traffic accidents are a drain on the resources of a society. They cost lives and could ruin careers and traumatise those involved. Motor Insurance is perhaps the only sector that brings losses to Insurance Companies. Accidents provide avenues for those corrupt enough to satiate their greed and either directly or indirectly the consequences affect all of us. Why is it then that we take a very casual attitude towards them? We need to make the public aware of what causes traffic accidents, how they can be prevented, what can be done with those who neglects responsibilities. For example, can we sue the RDA in courts for negligence when they do not construct or maintain roads properly, or local councils for not providing proper lighting to the roads? Why does not the Insurance Companies combine together and divert ten-percent of their advertising budgets to fund an awareness campaign? Why do not the media, especially the electronic media who can deliver a very powerful message,give concessionaire prime time rates for broadcasting such messages?
Now I know that I am guilty, not of the charge of failure to avoid an accident, but of taking the easy way out since I could afford the fine, instead of taking the trouble and effort spending my energy to protect my legal rights as a citizen. I am guilty of being yet another member of a society who looked at my convenience and did not take the trouble to establish a fact that there is another side to a 'failure to avoid an accident'.
Hayleys Electronics Ltd., sole agent in Sri Lanka for Philips consumer electronics and home appliances, has reported record sales with the launch of 14-inch and the 20-inch Philips NICAM television sets in Sri Lanka, says a company news release.
The first consignment of 500 televisions were instantly taken at a function held to launch the new NICAM range to dealers recently. This first shipment was worth over Rs. 9 million, Mr. Chinthaka Wanasinghe, Brand Executive for Philips said.
The Philips NICAM Stereo TV system which was introduced to the country for the first time in August 1998, enables viewers to choose a language of their preference when watching their favourite programmes as well as to listen to programmes broadcast in stereo format, provided the programme is on a NICAM transmission, Mr. Wanasinghe added. Hayleys Electronics now offers the full range of Philips NICAM TVs in 14-inch, 20-inch, 21-inch, 29-inch and 48-inch size.
All TVs offer the "Smart Picture" feature (where all the important picture elements are instantly adjusted to optimize viewing pleasure), "Smart Sound" where sound is instantly adjusted to suit each individual's sound preference (3 Watts RMS, Full Range Speakers with Auto volume levellers), "4x3 Expand" (expands movie images recorded in letterbox format by removing the black horizontal bars at the top and bottom), and Child lock to prevent children from accessing certain channels.
The 14-inch and the 20-inch TV sets are priced at Rs. 19,900 and Rs. 28,900 respectively and are available at all the Hayleys showrooms outlets as well as dealer outlets islandwide and at the Hayleys Duty Free Shop at Katunayaka.
Hayleys Electronics has also added three new audio systems to the company's products range. The Philips FW399V-VCD Mini System is a three Video CD Changer with video CD version 2.0 and 1200 watts of power output (PMPO). The other new audio systems are the FW398C-3 CD Mini System with 800 watts of power output and four speaker surround sound system, and the AZ2755 portable CD mini system with double cassette radio and remote control. Philips will also shortly launch its range of flat screen TVs.
"We are introducing all these Philips products at very attractive prices so that they will be affordable to a wide spectrum of customers," Mr. Wanasinghe said. With the recent introduction of the Ran Dahara easy payment scheme via Bank of Ceylon the purchase of Philips, Daewoo, Usha and Daytron appliances from Hayleys Electronics has been made even more affordable, he added.
US based DiNi Communications Inc., together with Ceylinco Consolidated has formed Ceylinco DiNi Technologies (Pvt) Ltd., partnership designed to provide cutting edge technology, networking and system integration, intra-internet application/software development, and global communications services.
Ceylinco DiNi Technologies aim to be a worldwide software development, consulting and technical solutions provider focused on delivering world class solutions and consultancy services for Cisco's Multi-service WAN product families, a news release said.
Ceylinco DiNi Technologies shall act as a system integrator who provide quality technical solutions and consultancy services to its customers in USA, Canada and Sri Lanka. DiNi Communications Inc., of USA is a Cisco Systems value added reseller.
Ceylinco DiNi Technologies will build its reputation on helping business and Internet professional master, the internet working technology required for success. Offering a full range of Cisco-certified hands-on training designed to enable its employees to put their expertise to work immediately.
The joint venture is managed by DiNi Communications Inc. Deshamanya Lalith Kotelawala is the Chairman of the Company and IT Professional Mr. Preshanth Wijedasa is the Deputy Chairman/Managing Director of the Company. Other Directors are Mr. Ajith Gunawardene, Mrs. P.K. Karunanayake, Mr. Rukmal Fernando, Mr. Nishan Sumanadeera, Mr. Jagath Alwis, Mr. Nandana de Zoysa, Mr. Dilan Ariyawansa, Mr. Mel Gunawardena and Mr. Chandana Jayasuriya.
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