Financial Times

SEC DG evades queries on insider dealing case
The new director general of the Securities and Exchange Commission (SEC), Palitha Gunawardena, is refusing to reveal information about the insider dealing case against the SEC's former chairman Michael Mack. The case is being resumed in the Appeal Court on February 23. Gunawardena refused to even say "no comment" when asked for the current status of the insider dealing probe and the case against Mack and others accused of selling Aitken Spence shares while having price-sensitive information.

He kept saying the queries should be directed to the Attorney General's Department, which he said was handling the case on behalf of the SEC, despite repeated requests for information from the SEC which initiated the action.
The Court of Appeal is hearing the writ applications seeking to quash the SEC's decision to prosecute Mack, a former chairman of the conglomerate, and another ex-director of Aitken Spence, Norman Gunawardene, for alleged insider dealing in the firm's shares.

They have denied any wrongdoing in the matter. The SEC decided to institute legal action against its former chairman Mack, and Gunewardene, on the advice of the Attorney General's Department. The SEC decided to prosecute them after a lengthy investigation into the transactions of Mack, Gunewardene and another Spence ex-director, Manil de Mel, as well as some of their family members.

The matter sparked a controversy after some of the SEC commissioners tried to suppress the investigation and even tried to ignore the advice of the Attorney General that there was a prima facie case against Mack and Gunewardene. These commissioners sought a so-called "second opinion" on the AG's Department's advice, prompting the AG to say they had "acted improperly."

The attempt to block the probe raised fears among investors that the case would be suppressed. Even now there are rumours in the market that the SEC is looking to compound the case. Romesh de Silva PC, appearing for Mack, said he is unaware of any attempt by the SEC to drop charges against Mack. "I am not aware of any such decision, and we will go for arguments which are scheduled to be held on February 23," he said. (RS)

Back to Business