Sources tightlipped on SEC chief Malik Cader’s status

By Duruthu Edirimuni Chandrasekera

Sri Lanka’s Securities & Exchange yesterday strenuously rejected reports that its Director-General, Malik Cader, had resigned or was under pressure to do so, following a probe over shares manipulation.
“He has not quit,” SEC chairperson Indranee Sugathadasa told the Sunday Times, on the sidelines of an SEC public awareness programme in Colombo. Rumours were rife in the marketplace on Friday over the crisis and what brokers were labelling “Malik’s impending resignation.”

Mr. Cader, when contacted, declined to comment. Some politically influential investors have been affected by an SEC probe on market manipulation and “pump and dump” practices, where investors buy a low-value stock, create hype, raise the price and then sell. Recently some brokers were fined on transactions made last year.

According to industry sources, these powerful investors had met high-ups in the government and demanded that certain SEC officials be removed, on grounds of “over-regulation that was killing the market.”When the Sunday Times asked Ms Sugathadasa whether the Ministry of Finance had called for Mr. Cader’s resignation, she replied, “I have not been notified.” However, she said that proper regulation would improve the investment climate.

Independent investors have expressed concern about the SEC’s indecisiveness on certain recent issues, and they have noted that the move to install price bands was “killing the market.”
“Price bands on certain stocks lead to a perception of over-regulation, and become unfair when it happens to someone who has bought stock some time back and is later confronted with this rule,” said investment company chief and former SEC director general, Channa de Silva. “Rules should be there to stay, not applied on an ad hoc basis.”

(See also Business Times for reports on speculation in the market over the crisis.)

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