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Where have all the good boys gone?
This - to the tune of that immortal classic "Blowing in the wind" - is what the investing public is asking from Sri Lanka's influential corporate bosses following allegations of insider dealing that have rocked the Securities and Exchange Commission (SEC).

Three weeks after newspapers revealed that SEC chairman Michael Mack and two former directors of Aitken Spence and some members of their families are being investigated for allegedly using sensitive information to sell shares in the Colombo conglomerate, the SEC has sealed its lips. So has the Attorney General's Department which had reportedly said there is sufficient evidence to file a case against the three former directors.

A separate probe is underway headed by a retired judge to provide a "second opinion" to the SEC commissioners now under acting chairman Nihal Jinasena.
While there has been a hue and a cry in public circles over the move to ignore the AG's advice, this is not the first time that this has happened. A second opinion was sought in an earlier case but it was done after informing the AG.

Was that procedure followed in this case? No one knows … least of all the public. The SEC saga has raised many issues particularly the immediate need to revamp the SEC and make sure there are no conflicts of interest between the commissioners and their roles. Then there is the question of transparency and openness.

That indeed is a serious issue. Mack are Co. are deemed innocent until proven guilty - that is the law of the land - but there is a need for openness and transparency by the SEC instead of the persistent "no comment" response that the media is repeatedly getting. Except for a short statement by the SEC when Mack took leave of absence and a statement this week from Aitken Spence, the public is in the dark as to what the SEC is doing on this case. What about the public right to know and to be kept informed? Ironically one of the objectives of the SEC, according to its website, is - TO PROTECT THE RIGHTS OF INVESTORS.

The SEC chairman, the former Aitken Spence directors and the CSE chairman have been described by colleagues as honourable men who are unlikely to resort to the kind of things they are being accused of. It is also said that the SEC probe was based on an anonymous petition and "flimsy evidence" on which the AG's opinion was based. If this is the case, the SEC and the AG must come clean and clear the air over growing uncertainty about this case.

Mack has been given the benefit of a second opinion while in all other cases in the past offenders were not entitled to this except in one case as mentioned earlier. Also by allowing a second opinion, are we not setting a precedent? Every alleged offender before the SEC in future would ask for a second opinion and should rightly get one if the SEC chairman is given this choice.

Surprisingly - and thankfully many corporate bosses would say - the fuss has not impacted on the stockmarket which is preoccupied with new IPOs and the peace process.

Whatever the outcome of the current probe, there is a serious need to overhaul the SEC and its role as the public watchdog. To ensure the public doesn't lose faith in the system, the sooner this is done the better.

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