The Sunday Times Economic Affairs Correspondent
The country's alleged share market scandal that kept the city guessing
which way the wind was blowing on a major insider-dealing exercise
indulged in by some of the securities watchdogs themselves is now
heading for an apparent showdown and what might turn out to be a
of speculation, the speculation trade itself which was under scrutiny
by the Attorney General and the public at large, has come up with
a clean certificate -- certified by a retired Supreme Court judge
and a chartered accountant, exonerating its own boss and others.
a retired SC judge and Lal Nanayakkara, currently Chairman of the
People's Bank, are reported to have cleared Securities Exchange
Commission Chairman Michael Mack and his one-time co-directors at
Aitken Spence, the hotel and travel industry conglomerate Norman
Gunawardene and Manil de Mel of insider dealing in the sale of Spence
move by the watchdog SEC to probe its own chairman by referring
the issue to a separate inquiry after the Attorney General has given
an opinion saying there was a prima facie case to indict Mack Gunawardene
and de Mel, has raised questions in business circles.
have complained of the motives for the unprecedented move stating
that the selection of the inquiry team left much to be desired particularly
in view of the fact that the retired Supreme Court judge was actively
engaged in commercial arbitration proceedings as an arbitrator.
in commercial proceedings is picked by private companies that are
in dispute. It was the SEC that nominated the two-member team to
probe the conduct of its own chairman. "Justice must not only
be done, but it must appear to be done" complained a broker
involved in the country's still fledgling stock exchange.
has also come in for some flak for its refusal to intervene on a
matter that involved the credibility of the Securities and Exchange
Commission and the Colombo Stock Exchange at a time it was state
policy to attract foreign capital and promote investor confidence
in the share market.
inquiry team has held that Mr Mack and his co-directors were innocent
of insider-dealing in a sale of shares of Aitken Spence after they
were privy to confidential price-sensitive information on one of
its apparel subsidiaries.
The report also
hints very strongly that the AG had not been provided with all relevant
documentation and had been misled by the SEC Secretariat. The SEC
has now decided to refer the inquiry report back to the Attorney
General for his views.
stated that the stand taken by the SEC is "scandalous"
to appoint a two-member team on a fee paid by the SEC in respect
of the conduct of its own Chairman when the AG has already expressed
an opinion regarding the complicity of the Chairman in the scandal.
also raised the question why this special procedure was adopted
in the case of the chairman when a number of other persons such
as Ana Punchihewa, former chairman of Pure Beverages, and some others
were charged on the advise of the AG without calling for separate
inquiries. When the AG's Department was contacted, a spokesman said
they knew nothing of this independent report.